CONFIDENTIAL
046153
MDHIA 214
CHINA'S INVESTMENT IN HONG KONG MAY HAVE REACHED US DOLLARS 6 TO 10 BILLION, NO RELIABLE ESTIMATE IS AVAILABLE BECAUSE IT IS VERY DIFFICULT TO TRACE THE ULTIMATE OWNERSHIP OF PHYSICAL AND FINANCIAL ASSETS IN HONG KONG. BUT BY NOW, CHINA MAY WELL BE THE LARGEST SINGLE EXTERNAL INVESTOR IN THE HONG KONG ECONOMY. INSOFAR AS HONG KONG'S MANUFACTURING SECTOR IS CONCERNED, CHINA IS THE THIRD MOST IMPORTANT EXTERNAL SOURCE AFTER THE UNITED STATES AND JAPAN, ACCOUNTING FOR AROUND 8 PERCENT OF THE TOTAL EXTERNAL INVESTMENT. THE BANK OF CHINA (BOC) GROUP IS THE SECOND MOST IMPORTANT BANKING GROUP CAFTER THE HONG KONG BANK GROUP) IN HONG KONG.
THE NUMBER OF CHINESE VISITING HONG KONG ON OFFICIAL CPG PASSPORTS IS STEADILY INCREASING. THERE WERE 9233 HERE ON 31 DECEMBER 1988 (INCLUDING THOSE IN EMPLOYMENT OR TRAINING, OR ON TEMPORARY STAY), A 46 PERCENT INCREASE ON THE FIGURE FOR 31 DECEMBER 1987. OF THESE, 6340 WERE EMPLOYED BY PRC ENTERPRISES, 952 BY JOINT VENTURES, 1684 WORKED FOR OTHER ORGANISATIONS AND 257 WERE IN HIGHER EDUCATION. THE NUMBER OF PRC OFFICIAL DELEGATIONS NEARLY DOUBLED IN 1988, AS DID THE THE NUMBER OF INDIVIDUAL VISITS BY PRC OFFICIALS (63,759 IN 1980). THE FIGURES FOR NON-OFFICIAL VISITS ARE 120089 FOR TWO WAY PERMIT-HOLDERS IN 1988 (CF 85673 FOR 1987) AND 110445 IN GROUP TOURS IN 1988 (CF 88369 IN 1987).
(D) ON ECONOMIC AND SOCIAL PROSPECTS FOR HONG KONG WE SUGGEST YOU USE FS' LATEST BUDGET SPEECH AND OUR PAPER TO FAC ON HONG KONG'S
SOCIAL AND ECONOMIC DEVELOPMENT (WHICH LOOKS FORWARD AS WELL AS BACK) AS A QUARRY.
WILSON
YYYY
ΜΑΙΝ
25
LIMITED
HKD
PRU
DISTRIBUTION
27
PS
PS/LORD GLENARTHUR
MR GILLMORE
ADDITIONAL
2
MR FIFOOT, LEGAL ADVISERS ME EDWARDS, LEGAL ADVISERS
PAGE 2 CONFIDENTIAL
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