TNAG-1051-FCO40-1301-China-s-economic-relationship-with-Hong-Kong-1982 — Page 62

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HK$1,600 million invested. of these 581, 199

were co-operative ventures in which some

HK$1,414 million (88.4% of the total) had been

invested. This gives an average investment of

about HK$7 million for each co-operative

venture;

Compensation trade. Machinery and equipment is "loaned" to the Chinese enterprise by a foreign

investor. The Chinese side then pays for the machinery and equipment in instalments from money earned through the foreign businessman's purchase of manufactured products. The plant

is thus owned by the Chinese enterprise once

the debt is cleared. According to Fang Zhuofen,

up to the end of 1980 4 such projects were running in Shenzhen and accounted for 2.1% of

the total investment (i.e. HK$33.6 million or

an average of HK$8.4 million in each project);

Joint ventures (hezi jingying). This is the

most formal sort of arrangement requiring fairly hefty investment by both parties who manage the enterprise jointly. Chinese and foreign partners are shareholders in the enterprise with their respective investments in equipment, machinery, land, buildings and offices calculated as capital stock. Profits,

which should be substantial, are shared in the proportion of the capital invested. Fang does not specify the number of such ventures in Shenzhen, but says they are few accounting

for 2.4% of total investment (i.e, HK$38.4

million);

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