G.F. 326
37
45.
Starting from about 1970, in addition to
their traditional business interests, the CSCBS began
to adopt a much more outward-looking strategy as
China's relations with Hong Kong and the West steadily improved. Steps were taken to expand their branch network - in order to attract Hong Kong dollar
deposits and to grant loans more liberally to Hong Kong-based industrial, commercial and property firms not connected with China. It has also been reported
that the CSCBS and some other China-controlled corporations were very active in the property market when the property boom was at its peak in 1979 to 1981. The CSCBS have expanded their lending services
to finance projects sponsored by the Hong Kong
Government such as the Home Ownership Scheme, participated in syndicated loans and established finance companies and joint-venture merchant banks.
They have also undertaken modernization programmes like computerization of banking services and modernised training programmes for bank staff.
46.
(d)
Summary
It is now clear that Hong Kong's financial sector can be of great use to China. Apart from the turn around in 1982, Hong Kong's financial
institutions have consistently held net claims on
China. Besides cross boundary financial
transactions, China has built up a banking network of its own in Hong Kong which participates actively in
customers' deposit taking business
(3)
and lending
services. As Hong Kong has become an important
financial centre in the region, the CSCBS here have
had a chance to participate in such more
sophisticated banking business as syndicated loans.
Also much useful information and valuable innovations
can be transmitted via the CSCBS in Hong Kong to
banks and other financial institutions in China for
their reference and consideration.
CONFIDENTIAL #B