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over 15% of the total number of branches in Hong Kong. They undertake virtually the complete range of banking operations and now play an active part in Hong Kong's foreign exchange, stock and bullion markets. The China Resources Company controls, sometimes indirectly, almost all China associated operations in the commercial sector. China controls two major shipping companies in Hong Kong, which in turn control subsidiaries both locally and in Panama (China makes extensive use of the Panamanian flag of convenience). The shipping companies operate about one fifth of China's
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international merchant fleet as well as purchasing second-hand vessels on China's behalf.
Hong Kong is uniquely placed to provide the neighbouring areas of China with:
a source of foreign investment
a base from which foreign technology and materials can be readily imported
a deep water port of international standard including a container terminal.
able to handle third generation container vessels and facilities unmatched on
the South China coast.
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an international airport again with unmatched facilities.
western international banking and financial institutions with worldwide links
a base for Western companies which are inhibited from establishing themselves
in China by poor international communications, poor accommodation and recreational
facilities.
base in which Chinese companies may learn from and experiment with modern
financing, business and production methods.
Hong Kong Investment in China.
5. Given these facilities it is not surprising that China's first and so far most ambitious Special Economic Zone (SEZ) is being developed immediately over the border
within Shenzhen Municipality. The Chinese authorities established SEZ's at Shenzhen, Zhuhai to the north of Macao, Shantou (Swatow) in Guangdong Province and at Xiamen
in Fujian Province, in early 1979. They are to be areas where incentives for
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