The Hong Kong and Chinese governments are close to signing a trade agreement that could give Hong Kong movies greater access to the mainland market, according to Hong Kong chief executive Tung Chee-Hwa in a statement made on Wednesday night.

Senior officials from Hong Kong and the mainland are scheduled to sign the Closer Economic Partnership Arrangement (CEPA) on June 30 in Hong Kong. According to Tung, the agreement could exempt Hong Kong movies from mainland quota restrictions.

The agreement covers goods, services and investment and is expected to benefit many service sectors including banking, tourism, advertising, audiovisual and exhibitions and conventions.

During a media session at the mainland government offices in Hong Kong, Tung said Hong Kong and China had "reached some initial consensus" on the film industry.

"Chinese films made in Hong Kong may enter the mainland market without quota restrictions. This is a huge breakthrough," Tung said. "Films jointly produced by Hong Kong and the mainland may be distributed on the mainland as mainland films - another breakthrough."

He continued: "The proportion of Hong Kong crew members in such joint productions may be increased substantially and movie stories need not to be mainland related. These are very important breakthroughs for the Hong Kong film industry."

At present, Hong Kong movies are classed as foreign by mainland authorities and are subject to China's tight import restrictions. Full co-productions with China are exempt from quotas but there are strict limits on the number of non-mainland cast and crew that can be used.