- 2 -
(
The Tokyo correspondent of the Frankfurter Allgemeine, in addition to raising the by now familiar questions as to what will happen about freedom to travel and the convertibility of the currency, devoted some space to the problems of access to technology if Hong Kong were to come off the Cocom list and what will happen about textile quotas. He concludes that as far as they are able, Hong Kong industrialists will flee from the Chinese a second time and that is why industry is scarcely investing at present despite the superficial appearance of things going well.
Richard Luce's visit got little attention apart from an AFP/AP report from Peking which appeared in Die Welt in Germany and reported on the Chinese reaction to Luce's remarks.
Reporting on an article in the American magazine, Business Week, dealing with the effect of capital outflows from South American countries and elsewhere on the property market in the United States, The Frankfurther Allgemeine in Germany singled out Hong Kong in the headline "Hong Kong threatened with flight of capital".
The Handelsblatt, the leading German business daily pointed out that there are "two sides to the coin": on the one hand bank and property company failures and the weakness of the Hong Kong dollar, and on the other the opening of new offices by the U.S. investment banker Goldman & Sachs and the opening of a branch by Germany's West LB bank. The author concludes that no one can really believe that China is going to kill the golden goose.
The financial Börsenzeitung also reported on the "two faces of Hong Kong". On the one hand an apparent financial crisis spurred on by the political uncertainty and Chinese propaganda and on the other continuing profitable production and investment. The capital outflow is offset by movements into Hong Kong. Hong Kong has survived the international recession better than many other countries and is already profiting intensively from the recovery of the international economy, according to the Börsenzeitung's correspondent The problems on the property market were at best accelerated by the discussions on the future of Hong Kong. 14 years are a long time for the amortisation of investments. To give up now would be as short- sighted as denying that it is possible that there will be negative developments at the end of this time. The article ends with a statement by the chairman of Merrill Lynch that the business opportunities in Hong Kong are among the best in the world.
The regional Südkurier in Constance struck a more familiar note in a feature on the weakness of the Hong Kong dollar with its subtitle questioning whether Hong Kong was not heading for an "orderly withdrawal" by the U.K.
Broadly factual accounts of the weakness of the Hong Kong dollar, the pegging of the Hong Kong dollar to the U.S. dollar, the rescue of the Hang Lung Bank and the fortunes of Carrian were carried by major and minor German, Italian and Belgian papers.
The Luxemburger Wort's correspondent in London reported at length on the pegging of the dollar and the increase in interest rates and stressed that Hong Kong is still a promising place for trade and finance for those who do not lose their nerve. Il Fiorino in Florence, carrying an article by Alan Chalkley, took a rather similar
/line