$
HF THE BANK RETAINS ITS STRONG ECONOMIC POSITION HERE, T IS AN UNDEN-WABLE FACT THAT THE BANK OF CHINA AND ITS SISTER BANKS NEVITABLY WILL HAVE INCREASED POLITICAL POWER AS 1997 APPROACHES. THE HONG KONG AND SHANGHAM BANK ABSORBS ABOUT 50 PER CENT OF THE TOTAL DOLLARS DEPOSITED INTO THE THE TERRITORY'S 154 HNTERNATIONAL AND LOCAL BANKS. WTS NEAREST COMPETITOR, THE BANK OF CHINA GROUP, GETS ABOUT 20 PER CENT.
CHINA HERSELF AND FOR VERY SPECIFIC REASONS, S INVESTING ABROAD THROUGH INCREASINGLY SOPHISTICATED ENTITIES LIKE CHINA INTERNATIONAL TRUST AND INVESTMENT COMPANY. CHINESE FINANCIAL MINSTITUTIONS, IN ORDER TO PLAY AN EFFECTIVE ROLE IN THE IR COUNTRY'S MODERNISATION, NEED THE EXPERTISE OF A GREAT INSTITUT:HON LIKE THE HONGKONG AND SHANGHA BANK. SUPREME REAL:KSM, A VERY TOUGH AND AGRESSIVE STANCE TOWARDS COMPETUTORS AND RIGOROUS DEMANDS ON STAFF, RECIPROCATED WITH AN EQUALLY STRONG MANAGEMENT COMMITMENT TO EMPLOYEES, ARE ALL WITAL ASPECTS OF THE BANK'S CORPORATE **CULTURE AND WILL STAND MIT ON GOOD STEAD IN THE COMING DECADE.
THE BANK'S CONTINUED GLOBAL EXPANSION CAN ONLY STRENGTHEN ITS PROFITABILITY AND COMPETITIVENESS. FIRMLY ANCHORED AS A MAJOR PLAYER HN THE INTERNATIONAL FINANCIAL COMMUNITY, THE BANK'S LATEST MOVE ADDS EXTRA INSURANCE FOR ITS CONTINUED INDISPENSABILITY TO THE PROSPERITY AND STABILITY OF HONG KONG NOW, AND WELL PAST
1997.''
5. THE DEBATE WILL NOW PRESUMABLY START AS POLITICAL ANALYSTS TAKE
ANECDOTAL COMMENT FROM BROKERS THE WR LEAD FROM THIS EDITORIAL.
AND OTHER BANKERS HIS SO FAR FAVOURABLE.
WHLSON
YYYY
HMLNAN 5800
HONG KONG AGREEMENT :
RESTRICTED
LIMITED
HD/HKD
N ABUS
HD/FED
GRO
RESEARCH DEPT.(FE)
DEP/HD PUSD
Ps
PS/LORD GLENARTHUR
PS/MR EGGAR
MR MCLAREN
MR GILLMORE
COPIES TO:
MR FIFOOT, LEGAL ADVISERS
AW LOEN IS
Cw
Ble
CW KERLY no
CONFIDENTIAL