TNAG-0946-FCO40-1165-Local-Intelligence-Committee-assessment-of-the-political-sit-1980 — Page 46

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SCR 1/46 SF 'A' V

SECRET

НКК

HKK 0531

RISALD

19MER

LIC HONG KONG

cop es sent

to Research D.

O.I.O.

F.E.D.

Copy No. 2 of 24 copies Page No. 1 of 9 pages

W REPORTBRUARY 1930

vader

চি

CHINA AFFAIRS

Reform of the Cadre System

Debate continues among Party cadres locally about the proposed

reform of the cadre system (para 1, January 1980 report) made necessary

by the shortage of "experts" and surplus of "reds". While the economic

case for reform is recognised by Beijing, it is also well aware of the

political and social problems it raises. There is much speculation among

Party cadres locally as to how their conditions of service might be changed

by the introduction of a new cadres' charter, whose impending promulgation

has been strongly hinted at in reports from Beijing. The consensus locally

is that it will contain incentives to persuade veterans to make room for younger cadres. It is however not expected to have much effect in

Hong Kong.

Banking and Finance

2.

The 13 CPG controlled banks in Hong Kong have been directed

by the Bank of China to make a major effort to develop closer relationships

with non-Chinese banks, businessmen (especially those with Taiwan connections),

professional bodies and local community associations. The banks have been

The

adopting various other measures aimed at modernising and expanding their

business, including the institution of a central audit system to be run

by the Bank of China and the establishment of a training department to

strengthen middle management. Individual banks are to specialise in such

fields as land and property, travel services, the stock market, foreign exchange, ship purchasing and property deals in the New Territories.

banks are to offer the same services as non-communist banks, including

certificates of deposit, credit cards, insurance, safe deposit boxes,

trustee business, long term loans and long term investment. It has been agreed in principle that the banks should be authorised to offer loans of up

to HK$5 m. without reference to the Bank of China in Hong Kong.

SECRET

/ para 3.