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a housing project in Canton, where Swire will provide project management, some professional expertise and skilled labour and certain materials and the municipality will contribute land and labour. Swire will have no residual involvement once the flats have been handed over to the Chinese authorities or sold to overseas Chinese. Swire's profit will be derived from the sale of those flats earmarked for overseas Chinese (i.e. one-third of the total).
3.
In addition to these Swire Group's projects, it is worth recalling that Jardine, Matheson and Co Ltd are involved in the China-Schindler Elevator Co in Shanghai and Feking in which Jardine Schindler (Far East) Holdings is a participant with 10% of the equity capital (total capitalisation is US$16 million). We realise, of course, that Jardine, Matheson and Co Ltd are registered in Hong Kong but for practical purposes we would be inclined to regard them as British as far as the current exercise is concerned.
4.
we too hope that British investment in China will rise from its present low level and steadily increase in step with the progress which China makes with her modernisation programme. But it is only fair to point out that at this stage British investors are not unique in approaching this market with caution. Cur Japanese colleagues have told us that although Japan is easily China's leading foreign trading partner, there are only four Sino-Japanese full joint equity ventures which could be described as actually operational at present. Others are at various stages of negotiation and realisation but progress in implementation has tended to be distinctly slow. Moreover there has been a number of cases recently which have attracted a fair amount of attention in the international press high- lighting the problems which can face foreign investors in China. In the circumstances it is not surprising if potential foreign investors - and not only the British are inclined to adopt a more circumspect attitude towards China at least in the short term.
Cc:
A J Seaton esq, BTC, Hong Kong
Your
sincerely
Mich werely,
8 Bren.
OM O'Brien
I webb Esq, Assistant Iolitical Adviser, llong Kong
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