CONFIDENTIAL # 3
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aggressive in securing business from industrialists, with a recent announcement that no upper limit would be placed on loans extended by the group to the local manufacturing
sector.
31.
In addition to the Bank of China, the Chinese
authorities have officially authorized the China International Trust and Investment Corporation (CITIC) (5), China Industrial and Commercial Bank as well as the China Investment Bank to raise capital overseas. greater involvement of these agencies in Hong Kong's banking sector can be expected. The takeover of Ka Wah Bank by CITIC may be viewed as a first step in this
direction. CITIC has now agreed to invest HK$350 million
to acquire 95% of Ka Wah's shares.
32.
In the manufacturing sector, the Hwa Yiu Pipe
Production Co. Ltd., which has close connections with
China, is building a factory in the Tai Po Industrial
Estate. It is estimated that investment in the plant and equipment will be HK$1,560 million, and production is expected to commence in October 1986.
A
Summary and conclusions
33.
Economic growth in China has slowed down since
the latter half of 1985. To the extent that slower growth helps to rationalise the use of energy and industrial raw materials, both of which are in short supply, such a
(5) Prior to this official announcement, CITIC
had already launched several bond issues in Hong Kong, Japan and Europe..
CONEIDENTIAL * 52
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