CONFIDENTIAL
056331
MDHIAN 1227
1 Y
LED BY GORDON WU, ONE OF THOSE WHO CANCELLED THEIR RIGHTS ISSUE (OF HKD3.8BN), ARE HALFWAY THROUGH AD HKD12BN MOTORWAY SCHEME TO CANTON (GUANGZHOU) AND HAD PLANNED HKD7.8BN POWER STATION
(SHAJIAO C). THESE MAY HAVE TO BE ABANDONED IF THE MONEY DRIES UP. BUT AS GORDON WU SAYS, ''CHINA IS NO MORE RISKY THAN HONG KONG. AFTER ALL, IF CHINA DOESN'T WORK OUT, HONG KONG WONT EITHER' HE, AND OTHER MILLIONAIRE HONG KONG ENTREPRENEURS, SUCH AS TT TSUI OF CNT HOLDINGS, HAVE BEEN RUSHING TO BEIJING IN THE LAST TWO WEEKS, SEEKING, AND APPARENTLY GETTING, ASSURANCES THAT FINANCIAL SUPPORT FOR THEIR HONG KONG BASED BUT CHINA RELATED PROJECTS WILL
CONTINUE.
.
7. BRITISH COMPANIES TRADING AND MANUFACTURING IN GUANGDONG, MANY WITH THEIR BASES IN HONG KONG, HAVE HAD LESS DISRUPTION TO THEIR TRADE THAN MANY EXPECTED. TOOTAL CHINA, WITH A FACTORY IN GUANGDONG, REPORT FEW PROBLEMS. WORK ON THE NUCLEAR POWER STATION AT DAY BAY, AN HOURS DRIVE FROM THE BORDER, HAS CONTINUED UNBROKEN AND THE SIZEABLE GROUP OF BRITISH EXPATRIATES WORKING FOR GEC HAVE NEVER LEFT THE SITE. ICI AND GLAXO, WITH BIG SALES FORCES IN SOUTHERN CHINA, PULLED OUT ALL THEIR EXPATRIATES, BUT ARE SLOWLY RESUMING WORK, BUT AT A LOWER LEVEL OF ACTIVITY AND SALES, THAN BEFORE.
8.
MEANWHILE CHINESE OFFICIALS DO THEIR BEST TO REASSURE THE HONG KONG AND FOREIGN COMPANIES, AND CHINA'SPROPAGANDA MACHINE URGES BUSINESS MEN AND TOURISTS TO RETURN. GUANGDONG OFFICIALS VISITED
HOPEWELL HOLDINGS LAST WEEK TO ASSURE THEM THAT WORK ON THEIR BIG PROJECTS SHOULD PROCEED. LOU YUHUA, GENERAL MANAGER OF THE GUANGDONG FOREIGN INVESTMENT SERVICE, ASSURED A GATHERING OF REPRESENTATIVES OF MORE THAN 30 FIRMS WITH FOREIGN INVESTMENT IN
GUANGDONG THAT ''THE OPEN DOOR AND REFORM POLICIES ARE NATIONAL, AND DO NOT DEPEND ON ANY INDIVIDUAL. AGAIN IT IS TOO EARLY TO TELL THE LONG TERM EFFECTS, BUT PLENTY OF FOREIGN AND HONG KONG BUSINESSMEN HAVE BEEN QUOTED AS SAYING THAT THEY DO NOT PLAN ANY
NEW INVESTMENT IN GUANGDONG UNTIL THE PICTURE CLARIFIES. BUT GUANGDONG, LIKE HONG KONG, IS SUFFICIENTLY FAR DOWN THE ROAD OF ECONOMIC DEVELOPMENT THAT THE AREA IS UNLIKELY TO COUNTENANCE AN
ABRUPT END TO THEIR PROSPERITY. MUCH OF THE AREA'S DYNAMISM WOULD
BE LOST HOWEVER IF CHINA'S POLICIES BECAME TOO REPRESSIVE AND
RESTRICTIVE, WHICH WOULD HAVE A CONSEQUENT DAMPENING EFFECT ON MANY HONG KONG AND BRITISH COMPANIES.
9. CONCLUSION: IT IS EARLY TO DRAW ANY FIRM CONCLUSIONS. MUCH WILL
DEPEND ON HOW THE CHINA SCENE CONTINUES TO UNFOLD. BUT GIVEN THE RELATIVE LACK OF VIOLENCE IN GUANGDONG, AND GIVEN HONG KONG'S
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