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compiled and released regularly by the Banking Commissioner's Office since the first quarter of 1979) revealed several interesting developments in the financial transactions between Hong Kong and China over the past
(1)
years
6.
In terms of gross financial transactions, external liabilities of Hong Kong's licensed banks to their counterparts in China grew by more than 50 times from HK$421 million at the end of March 1979 to peak at HK$21,909 million at the end of December 1984. At the end of December 1985, they stood at HK$20,282 million. External liabilities of deposit-taking companies (DTCS) in Hong Kong to banks in China also rose at a rapid rate over the same period, showing roughly similar movements as those of the licensed banks but involving much smaller absolute sums. Hong Kong's licensed banks' claims on their counterparts in China remained relatively stable until the ena of 1982, moving generally in the range HK$5,500 million to HK$6,000 million. These claims then increased rapidly, to stand at HK$23,508 million at the end of December 1985. DTCS' claims on Chinese banks rose rapidly until the first quarter of 1981. This was followed by a sharp downtrend before picking up again in the first quarter of 1985. At the end of December 1985,
these claims stood at HK$829 million. Claims on non-bank customers by licensed banks showed a very substantial increase, from only HK$2 million at the end of March 1979 to HK$5,737 million at the end of December 1985. Claims on non-bank customers by DTCs also rose significantly, from practically nil to HK$539 million over the same period.
(1) There are at present no statistics on the external
liabilities (claims) of the non-bank public in Hong Kong to banks in China. These are, however, believed to be small.
CONFIDENTIAL #2