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1980 for establishment of US$50 million joint venture company which will build, buy, sell, charter and manage ships for international
market. Will initially confine itself to bulk carriers. Currently
negotiating purchases of ships from China.
6.
Two features noteworthy about Sir Y K's agreement:
(a)
(b)
Chinese control only 45% of venture, as opposed to usual 51%;
Sir Y K himself Chairman of Corporation. Chinese regulations
stipulate that they appoint Chairmen of joint ventures.
Sir
Y K's appointment an indication of important role of Hong Kong
Chinese in development of China's trade.
7. Few joint ventures so far approved by China's Foreign Investment
Western companies showing cautious attitude.
Control Commission.
Chinese joint venture law of July 1979 vague on legal conditions
for foreign partners. Subsequent law established tax rate at a
basic 33%. But legislation still awaited on issues such as patent
protection.
SHIPPING POLICY
8. As major beneficial owners of flags of convenience (FOC) heavily
committed to cross-trading in bulk trades, Sir Y K and other
Hong Kong shipowners are opposed, as is UK, to UNCTAD moves to
eliminate FOCS and impose a bilateral cargo-sharing regime in bulk
trades.
9.
rejects
UK reflects UNCTAD allegations that Hong Kong itself is an FOC: it
is a port of the British registry with standards similar to those for
vessels registered in mainland UK. Separate Hong Kong register (which
Sir Y K has advocated) would undermine this stance with adverse
consequences for both, UK and Hong Kong.
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