COME IDENTIAL
2
súms of less than HK$20-30 million.
At the board meeting it was felt that it would be wrong to reject the Bank's offer the first time they had put their toe in the water, simply because the amount was small by normal MTR standards. The Board also thought that, even for the small offer to be made, high-level consultations must have been involved with Peking and it would be a great loss of face for those who had advocated a forward move if it was rejected. think the Board was right on both counts.
CHAC
50
I
The Bank initiative fits in well with the sort of outward-looking banking policy described in our telegram No. 850 of 6 July as being the message contained, according to the press, in a new policy directive. I am not sure that a directive.as in the terms described by the press actually exists. We have not picked up anything about it from other sources. However, there can be no doubt that there is a new atmosphere in the Communist banking world. This seems to fit in with the new policy on international trade practice described in Peking telegram CREDA 124 of 27 June and indeed with the recent holding of a Finance and Trade Conference in Peking.
6.
I think we can now expect to see a more active and more "capitalist" Bank of China operating in Hong Kong. We shall monitor what they are doing as carefully as we can. There could be potential dangers from their increased involvement; but most of the consequences will, I think, be beneficial and will help to build confidence.
CC
R C Samuel Esq
Far Eastern Department
ET Davies Esq
PEKING
Far Eastern Section Research Department
еле
(D C Wilson)
lavind
CONFIDENTIAL
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