TNAG-1646-FCO40-2293-Chinese-investment-in-Hong-Kong-1987 — Page 4

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5.

In respect of the cumulative amount of

Measured

investment in Hong Kong's manufacturing sector up to the end of 1985, China's share was larger, at 19.2%.

in terms of the year-end book value of fixed assets, the total amount attributable to China stood at HK$2,398 million at the end of 1985. Again, China ranked third after the U.S.A. and Japan.

6.

The above figures suggest that Hong Kong has not been over-reliant on China's capital, at least not so in the manufacturing sector. Until very recently, China has not been particularly active in investing in Hong Kong's manufacturing sector. On the other hand, its investment in some other sectors like trading and shipping, property, banking and finance, and infrastructural developments may be more substantial. While the lack of systematic and reliable data has rendered it impossible to gauge precisely the relative significance of China's investment in these areas, there is no indication that the investment undertaken by companies with PRC interest has been disproportionately large. In fact, for the Hong Kong economy as a whole, continued investment by local enterprises and further inflows of capital from countries such as the U.S.A. and Japan imply that it will not be easy for China's capital to establish a highly influential status.

7.

Incidentally, I learn from you that PA is interested in seeing an updated list of the major investment projects known to be undertaken by companies with PRC interest in the past few years.

now been compiled and a copy is attached.

This list has

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(Esmond Lee)

for Secretary for Economic Services

c.c.

PA's Office (with encl.)

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