RESTRICTED
RESTRICTED
HKB 090/1
19 Kay hay
Fia
RECEIVED IN BEGISTRY
0 1993
REGISTRY
34
101735
MDLIAN 7058
TOP COPY Q DIST?
FM PEKING
TO PRIORITY HONG KONG
IN.
TELNO 36
OF 230345Z JULY 93
#A
INFO PRIORITY FCO, BTC HONG KONG, UKREP JLG HONG KONG
YOUR TELNO 1168 TO FCO: CHINESE OVERHEATING: IMPACT ON HONG KONG
1. WE HAVE NOT SEEN ANY REFERENCE TO COMMENTS ATTRIBUTED TO VICE-MINISTER YU XIAOSONG REPORTED IN TUR. SO FAR, WE ARE NOT AWARE OF ANY OTHER PUBLIC STATEMENT LINKING CHINESE INVESTMENT IN HONG KONG TO CURRENT INITIATIVES TO COOL THE ECONOMY.
2.
WE WOULD NONETHELESS EXPECT TO SEE SOME VOLUNTARY REPATRIATION OF FUNDS BACK TO CHINA AS CONTROLS ON THE MAINLAND'S FINANCIAL AND INVESTMENT SYSTEMS BEGIN TO BITE (AS PREDICTED IN YOUR TELNO 1 TO UKDEL TOKYO). OFFICIAL CONCERN IS ALSO GROWING OVER THE LEVEL OF CORRUPTION AND ILLICIT (OR AT LEAST IRREGULAR) CAPITAL OUTFLOWS FROM THE MAINLAND. THIS MAY MEAN THAT NEW INVESTMENTS IN HONG KONG ARE MORE CLOSELY SCRUTINISED AND THAT SOME FUNDS ALREADY INVESTED RETURN TO THE MAINLAND BEFORE DIFFICULT QUESTIONS ARE ASKED. HOWEVER, THE OVERALL IMPACT OF THIS SHOULD PROBABLY NOT BE EXAGGERATED.
3. WE SHALL CONTINUE TO WATCH FOR ANY NEW CONTROL MEASURES WITH A HONG KONG CONNECTION.
MCLAREN
YYYY
ΜΑΙΝ
.HK FINANCIAL
.(DIALOGUE)
HKD
25
PUSD//HD
ECONOMIC ADVISERS//HD
ERD//HD
FED//HD
DISTRIBUTION
36
PAGE
RAD//MR WYE
PS
PS/MR GOODLAD
PS/PUS
SIR J COLES
MR HUM
1
RESTRICTED