CONFIDENTIAL B
MEMO
To
From Secretary for Economic Services
Ref.
(29) CR 5/1916/84
Tel. No.
Date
in
5-8102685
6 July 1987
APA ITA 29/7
HKC102/1
Secretary for Security (Attn: Mr R Allen)
Your Ref..
in
dated
LAST
PAPER
China : Investment in Hong Kong
Plean way k HKD + to Pching 29,
-
TSX 2/83 SF'A'
1.5.87
Al
со
"17
0.1.
File in LEZ
V. I apologize for the delay in replying to Mr Murphy's memo of the above reference.
2.
By its very nature, complete statistics on the amount of investment distinguished by country of origin are difficult to obtain. This is especially so in the case of Hong Kong where there is no control on the inward and outward movement of funds. Thus, it is not possible to ascertain the exact proportion of capital investment in Hong Kong associated with foreign capital, let alone the specific proportion attributable to any individual country.
3.
Nevertheless, some incomplete information on this subject, derived from a survey conducted by the Industry Department, is available for the manufacturing sector. It was reported that a total of 509
establishments in Hong Kong were known to involve foreign
what went and 76? capital as at the end of 1985.) The total new capital
formation in these establishments (in terms of net acquisitions of fixed assets) which was attributable to foreign capital amounted to HK$1,031 million in 1985. This represents about 5% of the total private sector investment in plant, machinery and equipment (excluding transport equipment) in the same year. Notwithstanding the crudity of these figures, they lend support to the view that a majority share of the total new investment in the manufacturing sector actually comes from local
investors.
3. F. 730
4.
As far as foreign investment in Hong Kong's manufacturing sector is concerned, China's share was not predominant. According to Industry Department's survey, net acquisitions of fixed assets attributable to PRC interests in 1985 amounted to HK$168 million, accounting for 16.3% of the total foreign investment in Hong Kong's manufacturing sector in that year. China ranked third after the U.S.A. and Japan in this context.
/p.2
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