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activities were to a large extent controlled by the various subsidiaries of the then China Resources Company; with each one of them specializing in handling the exports and sales of certain product groups to Hong Kong. Well known examples of such subsidiaries include Ng Fung Hong Ltd. specialized in cereals, oil, vegetables, rice and livestocks; Teck Soon Hong Ltd. specialized in precious
herbs, spices, tea, fur, wool and leather; China Hua Yuan
Co. Ltd. specialized in paper, cosmetics, watches and decoration materials; and Chinese Arts and Crafts (H.K.)
Ltd. specialized in arts and crafts.
12.
Against this background, China's investment in
Hong Kong in those days was undertaken with a view to
facilitating merchandise trade and thus was concentrated in activities like transportation (mainly shipping, principal interest represented by China Merchant Steam Navigation Co. Ltd.), banking services such as trade financing (interest represented by Bank of China and its twelve sister banks) and department stores (serving as retail outlets for Chinese products). Most of the Chinese department stores are joint ventures with local interests.
13.
The first change came around 1977 when China-interest companies started to engage in large scale property investment and property trading, which they had previously refrained from entering on any scale. Notable examples are China Resources Company's investment in the 53 storey China Resources Building (and the adjacent Hong Kong Exhibition Centre) and in the Tin Shui Wai development through its interests in Mightycity Company. Kiu Kwong Investment Corporation Ltd., a China-controlled property firm, also became active in real estate
developments.
G.F. 326
CONFIDENTIAL &&
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