16
financial relations between China and Hong Kong, they also
function as a channel through which China can raise funds
for financing development projects in China, as well as
importing modern management skills and technology.
Following the Fujian Enterprises Co. Ltd., which changed
its status in October 1985, the Guangdong Enterprises Co.
Ltd. became a holding company in January 1986 with its
registered capital increased from HK$5 million to HK$50
million.
Prospects for expanding into the China financial sector
30.
Many foreign banks have been attracted by the
potential opportunities for foreign investment and foreign
financing in China. Although China has traditionally
relied on its accumulated trade surpluses for financing
its purchases from abroad, the country's recent trade
deficit (amounting to US$14.9 billion in 1985 compared with only about US$2 billion in 1984 (3)) and sharply
lower foreign exchange reserves (down from US$16.7 billion
in September 1984 to about US$10.85 billion in June 1985
(3)
According to figures recently released by China's Customs Bureau. But according to China's Ministry of Foreign Economic Relations and Trade, the visible trade deficit amounted to US$7.6 billion in 1985, compared with US$1.1 billion in 1984. The discrepancy is due to different methods of calculation. The Customs figures are based on the flow of goods registered at Customs posts, while the ministry figures are derived from signed contracts.
6. F. 326
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