*
CONFIDENTIAL #
9
continue. Again, the price of securing a reliable supply
may become a matter of concern.
22.
(d) Building and construction and
property development
(i) China as an investor and a final user
Providing premises for the use of PRC-controlled
organisations represents a very substantial part of China's investment in Hong Kong's property sector.
Notable examples are the new Bank of China Building and
the China Resources building. In addition PRC-controlled
corporations have also engaged in the development of residential property for sale, and sometimes even in
property trading. The Bank of China Group has become very active in financing property investment, and this is not confined to PRC-controlled corporations. Chinese
construction companies are also active in undertaking
construction contracts in Hong Kong.
23.
During the property market slump between mid
1982 and mid 1984, China's investment in real estate
development in Hong Kong declined. Since the second half
of 1984, the property market in Hong Kong has recovered strongly and so has China's investment. During the past
two years, PRC-controlled corporations have moved into new
areas like hotel development and infrastructual projects,
notably the Eastern Harbour Crossing. While it is
difficult to quantify China's involvement in real estate
development in Hong Kong, it is likely that China's
investment has contributed significantly to the revival in
real estate development activities in the past two years.
This involvement is expected to continue.
G.F. 326
CONFIDENTIAL #