GF 323
CONFIDENTIAL
29
機密
42.
(b)
China's investment in Hong Kong
In October 1988, many reports and rumours appeared on Hong Kong's newspapers about the Chinese government undertaking a "house-cleaning" campaign with a view to restoring economic order and discipline, and eliminating malpractices in some PRC-interest companies in Hong Kong. It is widely believed that business activities undertaken by PRC-interest companies, particularly those smaller and less well-established ones will experience a quieter period in the months to come. This is particularly so for those activities that are considered by the Chinese government as somewhat speculative in nature like property and securities trading. Recently there have been rumours that some PRC-interest companies are keen to dispose of some of the property and securities in their possession. It is also reported that there have been suggestions from some top Chinese leaders that the number of PRC-interest companies in Hong Kong should be substantially reduced.
43.
It is generally believed, however, that the large and well established PRC-interest companies will not be affected. On the contrary they may even benefit from this campaign because business may become more concentrated in their hands as some of the smaller companies withdraw from Hong Kong.
44.
Although the general atmosphere is one of rectification and streamlining, well established companies like China Resources (Holdings) Co. Ltd. and China International Trade and Investment Corporation (CITIC) still appear to be active in property transactions. former bought a new commercial/residential building (occupation permit not yet granted) in Wan Chai from Yu
The
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