CONFIDENTIAL
- 2 -
(e)
(f)
(g)
(h)
(j)
As in many parts of China previously visited by Industry Department, Hong Kong was the largest overseas investor though such investment would had
included Taiwanese investment and Chinese investment in Hong Kong
reverting to China as in the case of the Qingdao brewery and the residential development visited by the delegation in Dalian (paras. 23, 41, 58 and 80).
Due to Hong Kong's excellent international links and shipping services, it also
served as an important transhipment centre for as much as one-third of the goods exported from these two cities (paras. 27 and 59).
Japan was the second largest investor in Dalian, but its presence in Qingdao
was surprisingly small. South Korea was the second largest investor in Qingdao (paras. 23, 44 and 63).
Down town Dalian was very polluted but the ETDZ in the country side was
pleasantly attractive (paras. 45 and 62).
At Qingdao Airport, the souvenirs we carried for the municipal authorities of
both cities were impounded by the customs despite the presence of a senior
official from the municipality who came to receive us. It was felt that the
many potential investors could expect similar treatment from the notoriously
unfriendly Chinese customs, which would not endear them towards investing
in China (para. 18).
Because it had many state-owned enterprises, Dalian was also troubled by the
"Triangular Debt' problem common in China, in which enterprises were
tangled up in enormous debts to each other with little working capital for
normal business. In the case of Dalian, the situation was slightly less critical
the officials claimed that the city had a net balance of credits in its favour
(paras. 16 and 61).
/ . . . . .