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CONFIDENTIAL
Taiwan woos HK capital: The Press reported on December 22 that Taiwan planned to relax banking regulations which prohibited HK residents from opening foreign currency accounts in Taiwan banks.
China and foreign firms begin energy plans: The Asian Wall Street Journal reported on 21 December that China was finally getting under way some long-delayed energy development projects with foreign partners. In the next six months alone China planned to begin construction of its first nuclear power plant; Atlantic Richfield expected to drill its first exploratory well on the Chinese continental shelf in the South China Sea; and Beijing was expected to conclude new offshore oil exploration contracts with some of the 33 other Western oil companies that had bid for drilling rights. The CIA reportedly said lack of energy threatened to stunt growth in China's economy and called it a fundamental crack in the foundation of China's modernisation plan.
Big housing need in Guangzhou for oil men: The SCMP on December 22 reported that 75 000 square metres of floor area for office premises and staff quarters would be required in Guangzhou for companies involved in South China Sea oil exploration. The Post also mentioned a project between the Guangzhou authorities and a Singapore interest by the Pearl River.
Beijing_oil_office in HK: The SCMP business news reported on December 23 that China was to set up a representative office in HK as part of its oil exploration project. According to sources, the Chinese National Offshore Oil Corporation (CNOOC) would establish an office in the colony early next year and later open offices in Houston and Paris.
China guarantees foreign investors: The Business Standard reported on December 23 that China was stepping up efforts to attract foreign investors with fresh offers of guarantees on capital returns, stable interest rates and profit margins.
How valuable is HK to China? : An article in the Asian Wall Street Journal, starting with a quote from the PM that the stability and prosperity of HK was so advantageous to China as she obtained 40 per cent of her foreign currency from there, asked where the figure came from. The article said a lot of China watchers in HK and overseas thought the figure was too high. One US authority calculated that China got "only" 25 per cent of its foriegn exchange receipts from HK. Mr. Y.C. Yao, a HKU economist, broke the figures up into a $4.4 billion trade surplus; $674 million in remittances; $952 million in travel and tourism: and $825 million in investment profits; around 35% in all. The story said the Bank of China would have the answers, but was keeping them to itself.
CONFIDENTIAL