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the pre-1979 situation. Competition among China-interest
companies has led to rapid growth in China's trade
activity in Hong Kong and has radically changed the formal structure of China's economic presence in Hong Kong.
Two important events in 1983
6.
In 1983, there were two important events within
the circle of China-interest companies which deserve particular attention although their repercussions cannot be fully assessed yet. First, in July 1983, China Resources Company, formerly an unincorporated company registered only with the Inland Revenue Department with a business registration certificate, was incorporated in Hong Kong under the new name of China Resources (Holdings) Co. Ltd. with a share capital and limited liability of HK$200 million. Since then, the company has been
operating under Hong Kong's Companies Ordinance. Second, Everbright Industrial Corporation and its sister company Violight Industry Co. Ltd., both under the chairmanship of
Wang
Guangying, started business in Hong Kong in August
1983.
7.
The exact motives for China Resources Company's
incorporation are not clear. First, it is widely regarded in the press) as a gesture of the Chinese Government's faith in the British-style legal system of Hong Kong. This explanation probably has some validity but may not cover the whole story. Cover
A second reason which has been
proposed is that, as the company no longer enjoys a monopoly position in China's trade with Hong Kong, there may be a desire to formalise its legal position in order to compete more effectively in the highly competitive Hong Kong market. In line with this development, one of its subsidiaries, China Resources Artland Co. Ltd., indicated
CONFIDENTIAL # 8