TNAG-1623-FCO40-2237-Relations-between-Hong-Kong-and-China-1987 — Page 223

CONFIDENTIAL ##

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enhancing Hong Kong's role as a major regional financial

centre.

55.

In terms of the volume of financial

transactions, the relationship between Hong Kong and China has intensified very substantially in recent years. Both Hong Kong and China have strengthened their presence and

commitment in each others' financial sector. Lastly, Hong Kong provides a convenient base for China's fund-raising

activities, from which China can have access to the

world's major financial markets as well as to the expertise and financial services it needs for arranging foreign currency loans. Given the reforms in China's own financial sector and its rapidly increasing involvement in Hong Kong's financial sector in the last few years, there seems good scope for considerable further development in financial relations between the two economies.

Economic Analysis Division. Economic Services Branch

Government Secretariat 24 March 1987