TNAG-1245-FCO40-1559-Press-reports-on-the-future-of-Hong-Kong-1983 — Page 65

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Trafalgar and its parent, Central Enterprises, could not pay $1.35 billion in debts and the disposals would leave its debt at $200 - 250 million. The Taipa City project in Macau and the Tin Shui Wai investment in HK would remain Trafalgar's main assets, a letter to shareholders says. The Journal commented that the company had staked its survival on the success of the Taipa project. To increase the appeal of Taipa flats Trafalgar had been promising to help HK buyers to become Portuguese citizens.

Taiwan plans offshore bank centre: The International Herald-Tribune on 12 May carried a Reuters despatch by John Ngai which said Taipei planned to set up an international offshore banking centre in an effort to become a major financial centre in Asia. The centre, approved by the government in February, and awaiting final sanction from parliament next month or in July, would provide tax concessions to foreign banks and a large measure of freedom from foreign exchange controls. It would compete with existing offshore banking centres in Singapore, Hong Kong, Manila and Bahrain and possibly also with a similar centre in Tokyo. Taiwan appeared to want to increase its political and commercial influence, bankers believed, at a time when the country was under pressure from the People's Republic of China which ousted it from China's seat at the UN in 1971 and was currently trying to supplant it in the Asian Development Bank. Several bankers doubted whether the country had the necessary expertise to operate the centre and predicted that experienced foreign exchange dealers would have to be brought in from Hong Kong, Singapore or Tokyo. Some bankers also doubted whether there would be enough demand for the centre in Taiwan, with similar centres already operating in the region, but Taiwanese officials pointed to the expiration of Britain's lease on HK in 1997, which they predicted would lead to a mass exodus of capital before "part of the colony" reverted to China. The Taiwanese economy minister predicted that the flight of money from HK before 1997 would be up to US$30 billion and said it would be a great help if Taiwan could get even a fraction of that amount.

Bank of China skyscraper: The Asian Wall Street Journal reported on 13/14 May that the "renowned architectural concern", I.M. Pei, had designed what would be the tallest building in HK and perhaps Asia as the new HQ for the Bank of China. The report said the skyscraper apparently was to stand as a symbol of China's growing influence in the territory and its hopes to keep HK prosperous after 1997, "when it says it will assume sovereignty from Britain". In a historical replay the structure would tower over a 42-storey HQ being constructed by the HK Bank. The article mentioned the Sino-British negotiations and the aim of maintaining prosperity and stability, but it said investors, many refugees from China, were deeply worried about the changes a communist government would institute. China had moved ahead in efforts to reassure leading members of the financial community by garnering their opinions on an eventual agreement.

China/US trade: The US embassy in Beijing has said the US surplus in trade with China narrowed to US$134.3 million in the first quarter of 1983 from US$348.6 million a year earlier, citing a large decline in agricultural sales to China. Exports to China fell 26 pc and imports from China fell 4.2 pc. The report was in the Asian Wall Street Journal for 13/14 May.

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