17
before rising again to US$12.6 billion in September 1985) both mean that it will almost certainly have to borrow from abroad to finance its modernizations programme (some examples are cited in paragraphs 27 and 28). Some bankers
have estimated that China will need about US$200 billion in foreign exchange over the next 15 years to accomplish its economic goals by the year 2000. Hence, with the liberalisation of China's financial policy towards the end of the 1970's, both Hong Kong's and other foreign banks
have been scrambling to establish a presence in China's financial sector by either setting up representative offices in China's special economic zones or applying to upgrade the status of existing representative offices to
branch offices.
}
31.
A,
However, despite the close economic ties between
Hong Kong and China and largely as a residual effect of the rigid "closed-door" policy pursued by China in the 1960s and early 1970s, China has remained relatively cautious regarding the granting of licences to foreign banks to operate branches in China (Table 11).
Up to October 1985, branch licences had been granted to only six foreign banks: Hongkong and Shanghai Banking Corporation, Bank of Credit and Commerce International, Banque Indosuez, and Standard Charterea to operate in the Shenzhen special economic zone, and to the United Overseas Bank of Singapore and Xiamen International Bank to operate
in Xiamen. The Xiamen International Bank was the first
joint venture bank in China. It was formed in June 1985
by the Hong Kong listed Panin Holdings Ltd., the Fujian branch of the Industrial and Commercial Bank of China, the Fujian Investment and Enterprise Corporation and the Construction and Development Corporation of the Xiamen Special Economic Zone.
G F 126
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