TNAG-1873-FCO40-2661-Relations-between-Hong-Kong-and-China-1989 — Page 146

FCO40 Hong Kong Department Records 聯邦事務部香港部檔案 All

GF 323

CONFIDENTIAL

(c)

25

機密

China's investment in Hong Kong's

financial sector

(24)

38.

The rumoured 'house-cleaning' campaign does not

yet seem to have had much effect on China's investment in

(25) Hong Kong's financial sector

It is believed that

the Bank of China Group is not involved in this campaign.

Rong Yiren, Chairman of the Board of Directors of CITIC,

was also reported to have said that his company's business

in Hong Kong would not be affected. However, the Bank of

China group has recently taken some small steps to reduce

competition between banks within the group. For instance,

in the foreign currency deposit business, a minimium

spread between buying and selling prices has been set by

the Regional Office of the BOC group, and the interest rates offered on foreign currency savings deposits by banks in the BOC Group have been standardised.

(IV) Investment

39.

(a) Hong Kong's investment in China

The most recent information on foreign

investment activity in China released by MOFERT (paragraph 14) did not contain a breakdown by country.

(24) In paragraph 32 of the last quarterly report of this

series, it was reported that Asia Standard

Development Company (a subsidiary of Yue Xiu

Enterprises) would be listed on the Hong Kong Stock Exchange around September this year. This flotation has now been deferred to an unstated date.

(25) It is not clear whether the withdrawal of China

interest and the subsequent closing down of Sinocorp Investments Ltd. - a foreign exchange and gold trading company was in any way connected with the house-cleaning campaign.

CONFIDENTIAL #3

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