tel: 071 270 2727
fax: 071 270 3369
1 August 1991
HKCO26/3
Mr N D Moakes Esq
Assistant Political Advisor
PB AUG 1991
Government Secretariat
Hong Kong
Dear Mr Morales,
CHINA RELATIONS COMMITTEE
Mr Jainly 20
epes
393 891M1
win to
Стия
го
1. I would like to express my appreciation for the recent China Relations Committee papers which you copied to Economic Advisers. I took over the position earlier held by Mr Hallet this year and provide advice to other departments on economic issues relating to China, Hong Kong and indeed most of the Asia- Pacific rim.
2. I was particularly struck by the reports of visits to three SEZS, Beijing and Tianjin from the Industry Department. I was surprised, given the the very cautious tone of the latest five and ten year plans, at the extent to which open door policies are being promoted and pushed forward in the SEZs. The sale of land- leases to foreign developers was particularly notable. Continuation of these policies look like good news for future prospects in Hong Kong even though there, is a distant prospect of direct competition in transport and other supporting
industrial services.
3. There was a noticeable difference of views between central and
SEZ authorities on one country two systems' with Shenzen apparently keen to expand the present border outwards from Hong Kong. One aspect of this tension was the report that firms in Shekou were part-paying employees in Hong Kong dollars, which I had understood to be illegal or at least discouraged by the Bank of China. Although at first sight this suggests higher foreign. currency holdings in Hong Kong than would otherwise be the case, I wondered if the dollarisation of neighbouring provinces might be of potential concern.
4. It was interesting to see the estimates by Economic Services of the economic impact of flooding in China, though I think