10
that the CSOBS active promotion of ECU deposits would
stimulate the development of ECU market in Hong Kong.19.
Taking the four Hong Kong incorporated Chinese banks for
illustration, they have shown rapid expansion in recent
years, and have diversified widely into a range of financial or non-financial related activities through the establishment of subsidiary and/or associate companies
(Table 8). These activities incluae, inter alia,
financial services, property investment, travel services and investment management.
20.
Although there are very few formal statistics on China's financial activities in Hong Kong, the following give an indication of the extent of China's attempt to diversify these activities in recent years, particularly into those areas in which it showed little interest in the
past.
21.
Mortgage of residential property: in the first half of 1985, the Bank of China Group competed actively with other financial institutions to enlarge its relative share of the home mortgage market, and was among the financial institutions that narrowed their spread between the best lending rate and the mortgage rate to about 1 percentage point or below from the previous 1.5 percentage
points. Meanwhile, since 1980 an increasing number of
CSOBS have participated in the Home Ownership Scheme (HOS) and Private Sector Participation Scheme (PSPS), by providing mortgage finance to buyers of flats under these
schemes (Table 9). It was reported that the Bank of China Group's mortgage loan portfolio for HOS/PSPS flats doubled in 1985, and the volume of loans to buyers of private sector residential flats also grew, by 66% (paragraph
17).
Lately in March 1986, some CSOBS, in connection with
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