TNAG-1457-FCO40-1981-Relations-between-Hong-Kong-and-China-1986 — Page 111

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provincial government in an overseas market. In December

1985, China Development Finance and China Investment and

Finance participated in arranging the issue of HK$100

million fixed rate CDs for the Hong Kong branch of the

Royal Bank of Canada. In February 1986, the Bank of Communications (a CSOB) raised HK$250 million through the

issue of fixed-rate CDs. Shortly afterwards there was an

issue of US$100 million five-year fixed rate CDs by the

Bank of China. The issue was lead-managed by Citicorp

International and China Development Finance, with 23-banks committed to join as co-managers. Apart from arranging issues of bonds and CDs in Hong Kong and in overseas financial markets, the amount of commercial paper bought by the Bank of China Group in 1985 rose by 47% compared with 1984. The Group also underwrote 33 Hong Kong dollar paper issues in 1985. These were interpreted by many bankers as a major step by China to upgrade its presence in international capital markets.

28.

It is envisaged that Hong Kong will play an increasingly active role as China continues to stepup its activities in the international money market. Guangzhou International Trust and Investment Corporation is now considering plans to issue bonds in Hong Kong to raise funds for financing construction and development projects in Guangzhou. The Bank of Communications (a CSOB) also

plans to raise HK$400 million through, the issue of CDs.

29.

There have been an increasing number of Chinese Provincial and Municipal Offices set up in Hong Kong

(Table 10), engaging in various activities including, inter alia, trading, property investment and fund raising

through bank loans or by issuing bonds. While these representative offices help to promote commercial and

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