BEIJING -- Fourteen Hong Kong-based banks have set up operational branches on the Chinese mainland in nine years after the signing of a key economic plan, the People's Daily reported Tuesday.

These branches of HK banks constitute 42 percent of the total overseas banks and hold respectively 35 percent of the total assets and 38 percent of the profits of overseas banks, according to the daily, the flagship newspaper of the Communist Party of China.

The mainland and Hong Kong signed the Closer Economic Partnership Arrangement (CEPA) in 2003 and since then a series of supplements annually, which give preferential policies and measures to Hong Kong service providers to enter mainland market.

The signing of CEPA relax restrictions for HK banks to invest in or buy shares of mainland commercial banks as well as lowered the requirements of the asset size for HK banks to set up branches on the mainland.

As of the end of this June, six HK banks had invested in or bought shares of six mainland-based banks, the daily reported.