TNAG-0946-FCO40-1165-Local-Intelligence-Committee-assessment-of-the-political-sit-1980 — Page 27

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Page No. 2 of 9 pages

Banking and Commerce

5.

The CPG Chiyu Banking Corporation in Hong Kong recently acted on

instructions from a Taiwan bank to remit funds to the USA. Whether the Taiwan

bank realised the political affiliation of the Chiyu Bank is not known but it is

of interest that, despite its surprise at the instructions, the communist bank

complied.

6.

There is considerable internal recrimination within the ranks of the

officials of CPG commercial organisations in Hong Kong, in some cases extending

to Hong Kong businessmen involved in cooperative activities with them. One of the

senior staff of China International Trade and Investment Corporation's (CITIC)

Hong Kong Branch has disparaged the Corporation's performance: he alleged that management was bad, operating profits were non-existent and survival was dependent on the interest from the initial investment made by the CPG. The China

Resources Co. has complained about the commercial success of a trading subsidiary

of the communist newspaper Wen Wei Pao, claiming that the subsidiary is taking

business from CRC.

7.

New measures to control Chinese exports are being discussed by senior

trade officials in Peking. These include a co-ordinated export licence and quota

system, minimum and maximum prices for particular categories of goods and

centralised control both of trade fairs in China and delegations and outlets in

Hong Kong. As far as the latter are concerned, such a move is not unexpected

in view of the many unco-ordinated commercial activities being carried out by

various CPG bodies in Hong Kong during recent months.

8.

The Kincheng-Tokyo Finance Co. Ltd. has commenced business in Hong Kong.

The new company, with an authorised capital of HK$5 m., is 50 per cent owned by

the Bank of Tokyo, and 50 per cent by the Shanghai-based Kincheng Bank and the

Bank of China. Its activities are to include international loan syndications,

trade finance and the financing of joint ventures with China.

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/ para 9.