TNAG-0946-FCO40-1165-Local-Intelligence-Committee-assessment-of-the-political-sit-1980 — Page 57

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6,

The China International Trade and Investment Corporation (CITIC)

has placed three separate amounts, each of at least US$1 m., on short term

deposits with American and Japanese banks in Hong Kong. CITIC has announced

a doubling of the present staff of five in its Hong Kong office.

Commerce and Industry

7.

The Hong Kong based China Merchants Shipping Co. announced that

it had been authorised by the State Council of China to set up an industrial

area of some 10 m. sq. ft. for foreign investment on the Deep Bay coast of the

She Hau peninsula (see para 12, December 1979 report). The zone will be available

for factory construction by March 1980 and will have a quay capable of berthing

vessels of up to 3,000 d.t.w. Electricity is to be supplied from Hong Kong.

Details were published of conditions for joint ventures in the zone. These

provide for agreements with an average duration of 25 years, with possible

extensions, and the right of foreign investors to select and dismiss local

employees. Annual rent for land will be between $2 and $4 a sq. ft. The

brochure announcing the scheme is well designed by China standards and bears

the stamp of professionalism.

8.

According to press reports, the Hong Kong firm, Millie's Holdings

Ltd., is carrying out a feasibility study into the establishment of an

"industrial frec economic zone" on the island of Lang Qi off the coast of Fujian

Province. This is the fourth such zone proposed in recent months the other

three being at Shenzhen, Zhuhai (near Hong Kong and Macau respectively) and

Shantou (Swatow).

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Communications and Transport

9.

A Deputy Governor of Guangdong, LI Jianan, announced that China had

decided to spend HK$450 m. to build a 90 mile second class highway (i.e. a tarmac

road nine metres wide) between Guangzhou and the Hong Kong border (see para 15,

December 1979 report). Where the finance will come from, who will be responsible

for construction and when building will begin are not yet known.

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