TNAG-0743-FCO40-947-Relations-between-China-and-Hong-Kong-1978 — Page 288

1

The co-operation between China and the consortia provides that

the latter will run the hotels for five years before they hand the management rights over to the Chinese government.

No

After the completion of the hotels and other facilities, a tourist visiting China can enjoy 24-hour services by buying a "through ticket" for the hotels through a Hong Kong or foreign travel agency. payment will be made in China. Besides, the hotels will be responsible for providing other travel services.

The hotels and facilities will be of international standard and

be managed by representatives of the consortia based in China.

Under this arrangement, the finance will be supplied by Hong Kong consortia who will run the hotels for five years before they hand them over to the Chinese authorities. This will not cause a drain on RMB nor affect the out-flow of Chinese foreign exchange.

At the initial stage, there were two other local consortia competing for this scheme which was eventually awarded to the Sun Hung Kai, Hopewell. and New World group.

According to another source, the motive of this venture is not profit-making. The consortia simply aim at helping China develop its tourist industry and. recovering the money they invested. Although this kind of investment does not accrue profits, it can strengthen Hong Kong's position enhance a stable development of its financial business and thus increase its earnings.