TNAG-1268-FCO40-1617-China-s-economic-relationship-with-Hong-Kong-Shenzhen-econom-1983 — Page 43

G.F. 326

UNTIIUENTIAL 11⁄2 1

12

-

16.

The rate of return to total assets for

non-financial establishments should be higher than

that for financial institutions because of the

difference in the nature of their operations but

7 1/2 times higher seems too much. If the rate of

return for non-financial establishments is assumed to

be 5%, i.e. about four times that for financial

institutions (1.2%), the estimated profits generated

by China's non-financial establishments in 1980 would

́be in the region of HK$1,688 million (about US$339

million). This together with profits generated by

China's financial institutions (HK$1,143 million or

US$230 million) would give a total profit of HK$2,831

million (US$569 million) in 1980. Assuming that profits of China controlled business increased at the

same rates as money GDP in 1981 (21.6%) and 1982 (14.5%), profits of China controlled businesses in

1981 and 1982 would have amounted to HK$3,442 million

(US$615 million) and HK$3,941 -million (US$649

million) respectively (Table 4).

CONFIDENTIAL #B