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37.
(b) China's investment in Hong Kong
There are signs that CITIC is stepping up its activities in Hong Kong, especially with respect to infrastructural developments. It was reported that CITIC and another China-backed company, the China Civil Engineering Corporation, had together taken a 30% interest in a consortium led by Hutchison-Whampoa Ltd. and Hong Kong Electric Co. Ltd. with a view to participating in the Hunghom Bay Development Project. another development, CITIC has formed a consortium with a French construction group to bid for the Tate's Cairn tunnel project.
38.
In
Apart from infrastructural developments, there were two industrial projects worth mentioning. First, China Everbright Holdings Co. Ltd. and Hong Kong Lotus Scientific Development Ltd. have recently formed a joint venture to produce colour picture tubes in Ping Shan, Yuen Long; total investment is to be about US$70 million and commencement of operation is expected to be the end of this year. Second, China Resources (Holdings) Co. Ltd. has formed a partnership with China National Electronic Corporation, another Chinese company, to set up a US$100 million factory in Tai Po to produce cathode ray tubes for TVs; production is expected to begin in
1989.
Concluding remarks : Implications for the Hong Kong
economy
39.
The possibility that the Chinese economy may once again become overheated in this year (paragraphs 1 to 4), as in 1985, is a cause of concern for Hong Kong's
CONFIDENTIAL # 3
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