TNAG-1457-FCO40-1981-Relations-between-Hong-Kong-and-China-1986 — Page 96

G F. 326

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(v)

financial and related business services,

e.g. brokerage of shares, stocks and

commodities (para. 26); and

(vi) the issue of bonds and CDs (para. 27 and

28).

5.

There are also añ increasing number of

China-Privincial and Municipal Offices being set up in

Hong Kong (Table 10), engaging in various activities

including trading, property investment and fund raising

(para. 29).

6.

Whilst potentially there appears to be a

considerable opportunity for foreign investment and

foreign financing in China (para. 30), China has

maintained a relatively cautious attitude towards the

opening up of its financial sector to foreign operators

(para. 31). Hong Kong, due to its geographical position

and cultural links, thus provides a valuable stepping

stone to the China market for many foreign financial

institutions (para. 32, and Tables 5 and 12).

7.

The role of Hong Kong as a source of funds is

also assessed (in paras. 34 to 38) to give some indication

of the scale of activity involved, although information in

this area is very scattered.

CONFIDENTIAL # 3