G.F. 326
39
49.
(b) Hong Kong's direct investments in China
Only very scattered information is available concerning Hong Kong residents' direct investments in China. However, it is believed that not until 1977 did Hong Kong residents begin to undertake significant direct investments in China.
Between
1977 and 1979, Hong Kong residents' investments in China primarily took the form of
processing-on-consignment and compensation trade agreements, most of them in Shenzhen. In line with China's pursuance of a more liberal economic policy which got fully underway in 1979, Hong Kong
residents' direct investment in SEZs generally and in Shenzhen in particular has increased significantly
since then.
50.
According to Jingji Daobao, a pro-Beijing periodical published in Hong Kong, by the end of August 1981 the Shenzhen authorities had signed some 814 contracts with foreign investors and the value of total pledged investments was estimated to be about HK$2,760 million (US$465 million, calculated using the exchange rate at the end of August 1981 of HK$ 5.941=US$1). Of this total, Hong Kong investors accounted for about 90%, i.e. about HK$2,484 million (US$418 million). More recent information, given in Asian Wall Street Journal on 5.2.1982, suggested that total foreign investment in Shenzhan was about
US$1.57 billion. The amount contributed by Hong Kong investors would be in the region of US$1.4 billion, on the basis of the 90% reported in Jingji Daobao. One possible explanation for figures reported by the Asian Wall Street Journal being much higher than those in Jingji Daohao was that the former might have
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