"WWAVE SEENITAN
DSR lic
13. All of these cooperative ventures appear to be export orientated with the Hong Kong firms responsible for final marketing. Compensation trade appears to take three general
forms:
a) The Hong Kong company supplies materials for processing while China provides the factory, equipment and labour and the company pays for their processing.
b)
The company supplies the capital equipment to set up a plant and also provides the raw materials. The materials are then processed free of charge, or at a reduced cost, in payment for the capital equipment.
c)
The company provides the plant and technical assistance while China pays for the capital equipment by providing the raw materials and processing them free of charge or at reduced cost.
14. Hong Kong firms identified as operating in the Shenzhen (Shum Chun)/Guangzhou (Canton) area include Atlas Electronics Corporation (radio and tape recording units), Winner Group (woollen knitwear), Spotlight (shirts) and Tsai Tsun Trading (jeans). Hong Kong firms also hold investments elsewhere in China, among them Novel Enterprises (woollen yarn) at Zhuhai (Chu Hoi), Asia International Electronics Ltd. (cassette tapes tape recorder components) at Peking, Wah Wai (trousers) at Shantou (Swatow) and Fat Shan Garment Manufacturing Company (jeans) at Foshan (Fat Shan). A number of other projects have been reported in the press to be at various stages of negotiation or completion.
15. According to press reports, a number of Hong Kong developers have held discussions with the Chinese authorities with a view to building hotels in China. Most of the plans under discussion seem to involve the provision by China of land, labour and any available building materials, whilst capital and building materials not available in China will be supplied by the outside interests. Despite the large number of press reports, and the hints dropped by Chinese officials (on 18 December 1978 Li Qiang told a press conference in Hong
TATURA
/Kong
89280 Dd 532113 200M 2/79 StS
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