HONGKONG
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selling services of various kinds in and through Hongkong, The latest developments suggest that China may become an increas- ingly important investor in Hongkong, not only in the service sector but even in the manufacturing industry.
The Chinese caused particular surprise recently when they ac- quired from the Hongkong government land in the New Territories on which to store the oil which they now sell in the Hongkong market. When you drive up to a petrol station marked FEOOC (standing for Far East Overseas Oil Company) you will be served with Chinese oil by a company identified with the People's Re- public. But the two most recent examples of Chinese official ac- tivity in Hongkong are even more striking. They are going to build on Tsing Yi Island, in the New Territories, a ship repair yard and an engineering factory involving between them invest- ment of about US$45 million.
The commercial thinking behind these two ventures is still some- what unclear. It is said that the Chinese do not have deep-water berths available for ship repairs elsewhere on their coasts (which, if true, is a remarkable vindication of the original choice of Hong- kong by the British navy). It is further said that the Chinese wish to take advantage of the Hongkong origin of the machinery which will be made to their design in this Tsing Yi factory, in order to sell it more easily to Southeast Asian and other markets. Similarly, it is said that they expect to use American technology in the ship- yard which would be difficult for the Americans to supply to China itself under their present legislation.
Technically speaking these investments are in the name of pri- vate companies in Hongkong whose executives are friendly to Peking, but there is no doubt that the Hongkong population takes them as a sign that the Chinese government proposes in the next period of time to collaborate with Hongkong and take advantage of its facilities rather than indulge in any confrontation. But this, of course, would not conflict with an ultimate programme to re- integrate Hongkong into the Chinese motherland, while it would also depend on Britain's continued acceptance of the three basic conditions unofficially required by Peking--no Kuomintang, no Russians and no self-government in Hongkong.
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Britain's objective would normally have been decolonization, and it is a source of some embarrassment in London that Britain
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