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LIC HONG KONG ASSESSMENT FOR JUNE 1979
CHINA AFFAIRS
Importation of Labour
The Chinese Government's scheme to send up to 100,000 workers to Hong Kong (para, 2, May Assessment) has now been dropped, following expressions of dissatisfaction by local communist trade unionists. It is understood that the Vice Premier who agreed the plan claims to have been confused by another scheme proposed at the same time under which additional cadres would be sent to Hong Kong to strengthen Party organisations,
Commerce and Industry
2.
Agreement has been reached between the communist China Merchants Steam Navigation Company and United States Lines for container shipments linking Whampoa and the USA; Hong Kong's Kwai Chung container terminal is to be used as the transhipment point. Transhipment to and from feeder ships is necessary as large ocean-going container ships cannot reach Whampoa, The agreement provides initially for two sailings a month between Hong Kong and Whampoa. Similar feeder services with Shanghai and Tientsin are also envisaged.
3.
The China Resources Company, through its oil supply subsidiary, the Far East Oil Supply Organisation (FEOSO), has been pressing for a site for an oil storage depot on Hong Kong Island to supplement its existing depot at Hung Hom in Kowicen. Although such a site is not easy to provide, importance is attached by the Government to making one available (though at full market price) in view of the benefit to Hong Kong of oil supplies from China.
4.
The China Resources Company has now acquired the prime site in Wanchai which has been the subject of negotiations with the Government for some months (para. 2, February Assessment). After the Government had declined a counter-bid of HK $ 200 m. made by the Company, the latter finally accepted the Government's offer to sell for HK$ 300 m., a price slightly below market valuation. The Company is to erect a prestige building, housing its headquarters, a trade centre and exhibition and conference facilities. It will be the largest Chinese trade contre outside China.
/Finance
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