TNAG-0743-FCO40-947-Relations-between-China-and-Hong-Kong-1978 — Page 22

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(Tin Tin Daily News: September 14)

Hong Kong, from now on, will be of great help to China's economic develop- ment. The Peking Government wants to make use of Hong Kong rather than to think of taking it back.

It has been reported that some consortia will build modern hotels for China on a semi-voluntary basis in an effort to help China develop its tourist industry

In Hong Kong, there will be many people willing to contribute to this project not only because they want to show their concern for China, but also to thank China for the stability it has offered Hong Kong.

(Hongkong Standard: September 16)

China intends to build several hundred hotels in tourist spots across the country. As many as 800 hotels up to world standard would be required to serve the country's needs as more tourist spots previously off-limit to outsiders are opened up.

The Peking authorities are said to have devised a five-year programme to build the hotels with foreign participation.

The terms of participation are subject to negotiations with various international groups and a number of real estate developers in Hongkong.

It is understood that the Chinese will make the land available, but the capital to finance the project will have to be arranged by foreign developers.

(Hongkong Standard: September 22)

Another property developer from Hongkong is seeking to join with American hotel groups in a bid to gain a share of hotel development in China.

The World-Wide Property Corporation, which last month bought the prime site at Queen's Way for $585 million, plans to develop a chain of hotels in the mainland.

A company director, William Yip, confirmed yesterday that he would be flying to the US on September 29 to meet China's authorised representative, Dr. Henry Liu, for talks.

Given the manpower and other resources in China, Mr. Yip said it would take up to two years for the completion of a hotel up to world standard.

Directors of the company also have interests in the lucrative casino business

in Macao.

Representatives of a large American consortium led by Pan-Am will visit Peking next month, while some other property developers in Hongkong are also making their own moves to get a share of the business.

It was learned yesterday that a senior official of Japan Airline Development Company, a subsidiary of Japan Airlines, was in Hongkong recently to explore the possibility of entering into similar deals.

The company has interests in several hotels in Japan and other countries and also holds minority interest in the Hotel Plaza.

(Asiaweek: September 22)

With China expecting 1m. visitors next year, its tourism officials are racing to expand facilities and train staff. Recently, a top-level delegation from China toured many of Hongkong's showcase hotels for tips on how to handle the expected influx of foreigners. Within a month, a group of leading property developers in the territory will arrive in Peking to complete plans for the construction of a string of hotels throughout the

country.

While Peking is not prepared to permit foreign ownership of assets in China, the developers are likely to pick up a larger share of tourist expenditure to get an adequate return on their investment. The hotels will be managed, maintained and eventually owned by China.

Just how much of a return the Chinese will allow their capitalist partners is not clear but one thing is certain: if the bottom line didn't spell profit, allegiance to the motherland alone wouldn't be likely to draw shrewd Hongkong interests into the deal.

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