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Rumour mill: In Saturday's "Between these columns", an item said when HK's
share market plummetted in September it was widely rumoured that the trigger was a prominent HK businessman who had returned from Beijing where he heard of China's plans to regain sovereignty and promptly sold his shares. Curiously, this week's rise on the market had been attributed to another alleged Beijing pronouncement this time to the visiting HYK-led delegation. Their concern was to get a 30-year extension to HK's lease and the rumour doing the rounds on January 13 was that one member of the deputation had called a friend saying China was likely to agree to this. Wishful thinking it may well have been, but apparently it caused speculators to flood back with every bit of cash they could beg, borrow or otherwise lay their hands on.
15.
BUSINESS ITEMS:
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HK & Shanghai Bank to help small industrial borrowers: The SCMP Business News reported on 12 January that the HK & Shanghai Bank was preparing to "throw open its doors" to small industrial borrowers who traditionally had little recourse to funds from banks. Following preliminary discussions with the CMA and the FHKI, "HK's largest bank” was seeking to develop guidelines to evaluate credit for small industries. But the loans would not be at concessionary rates. The Bank's local general manager said it was hoped to arrange something by Chinese New Year. The Post reported that the Bank might just be the first to launch a formal financing scheme for cottage industries. Nothing yet had come of similar discussions the CMA had with the Bank of China more than a month ago. The CMA's deputy secretary general, Ms Y.Y. Tang, said there was still no word from the Bank of China, adding that the Association needed to follow up the initial talks.
Secretary for Monetary Affairs says future HK currency must float: The Secretary for Monetary Affairs said at a seminar that a free floating currency in any shape or form would be the key to the dominance of HK as a top financial centre, but that was far from ruling out the need for the continuance of an independent and established legal system and a government that was free from the influence of arbitrary powers. He emphasised the need to keep the existing foundation of HK. Worries over the future had been depressing the HK dollar, but only to an extent. The local public were too sensible to let something like political rumours get them down for long. Another speaker at the seminar, Mr. Kent Price of Citibank, also said rumours should not upset the confidence of HK. No doubt China would continue to loom large over HK's future, while HK had a key role in its modernisation. But thinking in terms of HK-China economic relations was not enough: one must not overlook the fact that HK was a regional centre in which and from which contacts were arranged for the supply of goods and services to other countries.
China's oil: The SCMP Business News on 11 January reported that two American and some European companies were said to be among those China had preliminarily chosen to explore for oil in the South China Sea. Esso, Mobil and some European companies were believed to be under serious consideration, but this did not necessarily mean that the decision
was final as further technical discussions were needed before contracts were awarded. A
total of 150 000 sq. km off the Chinese coast was earmarked for joint exploitation with the West last February.
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