In this thesis, historical institutional analysis of neo-institutionalism will be adopted as the research approach. The analysis combining the international institutional background and domestic institutional development in China and Hong Kong indicates the structural dynamics and strategic goals why China establishes CEPA with Hong Kong. Besides, I focus on the provisions of CEPA and summarize the difficulties of further development and perspectives. I wish this thesis could be studied as reference for scholars and experts in the field of Mainland China studies.