G.F 336
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Background history
3.
Up to 1977, the formal structure of China's economic presence in Hong Kong remained essentially
unchanged compared with the years immediately after 1949
when the PRC was first established. Trade and other
economic activities of China in Hong Kong were then mainly
handled by various Hong Kong registered companies and agencies which represented specific ministries of the Chinese Government. The three most important examples of these companies and agencies were the China Resources Company (chief representative of the Ministry of Foreign
Economic Relations and Trade), the Bank of China (chief
representative of the Ministry of Finance) and the Hong
Kong Branch of the China Merchants Steam Navigation
Company (chief representative of the Ministry of
Communications).
Though business activities were carried
out in a rather conservative and covert manner, these
China-interest companies enjoyed steady growth
capitalizing on their monopolistic positions.
4.
However, since 1977, when the Four
Modernization Programme was first launched, mainly as a consequence of China's adoption of a more liberal (by past
standards) policy attitude towards foreign economic and
trade relations, trade and other economic links between
Hong Kong and China have assumed new vigour and become
increasingly more intimate generally. As a consequence,
Hong Kong has recovered its historical status of serving
as an important entrepot for China's foreign trade.
Against this background, China-interest companies in Hong Kong have also undergone some changes. Besides stepping
up activities in those areas where they traditionally have
vested interests, these China-interest companies have also moved into areas like property investments which they had,
CONFIDENTIAL # 3