TNAG-1942-FCO40-2768-Internal-economic-situation-in-Hong-Kong-1989 — Page 70

Middle East

Xx

3

Access varies;

eq Saudi closed except to minority stakes; UAE

and Bahrain open. But everywhere inefficient, unprofitable,

etc. Bahrain's earlier role as offshore banker to region

curtailed by banking troubles and economic downturn. Sharia law

strictly observed in Saudi. In sum, few if any attractions to

foreigners on account of political, religious, cultural aspects,

although some Japanese interest in fund management in Bahrain.

Ultimately, substantial potential for increased efficiency etc,

but for foreseeable future UK firms content with benefit of

considerable volume of business that is put through London because

of weakness of local arrangements.

Australia & New Zealand

Both substantially open (NZ particularly liberal) and

over supplied. Competition and efficiency increased substantially

in recent years. Few opportunities for UK; but few threats.

S Korea

Foreign banks admitted but cannot access much won funds (no money

market, no local customer base); bank lending subject to

directions. Stock market closed to foreigners, but opening in

prospect 1990/91. In sum, beginnings of liberalisation but still great scope for increased competition and efficiency. UK firms not particularly enthusiastic, on account of cultural factors.

immediate threat to London, but could contribute to general drift

eastwards of world's financial focus.

Hong Kong

Already open enough by any yardstick.

Singapore

NO

Onshore licences difficult to obtain;

probably overbanked, but

-

not necessarily at maximum efficiency.

profitable

Offshore market quite

probably as much a complement as competitor to