TNAG-1458-FCO40-1982-Relations-between-Hong-Kong-and-China-1986 — Page 92

CONFIDENTIAL #B

27

also have a strong technology and management team for improving the skills of the Chinese workers.

69.

On the thorny issue of foreign exchange, it is likely that the requirement for foreign exchange balance will stay for some time in view of China's weak foreign currency reserve position. It is especially important for foreign investors to think carefully about the overseas marketing outlets for the goods they produce in China. long as foreign exchange controls remain in force and Renminbi cannot be converted freely into foreign currencies, foreign exchange balance will continue to be a problem to most foreign investors.

So

Economic Analysis Division Economic Services Branch Government Secretariat 16 October 1986

G.F. 326

CONFIDENTIAL & B

!