CONFIDENTIAL
167516 MDHIAN 5578
OTHERS
10. ACCORDING TO A STUDY CONDUCTED BY THE UNIVERSITY OF HONG KONG AND JONES LANG WOOTON, JAPANESE INTERESTS BOUGH US DOLLARS 0.56 BILLION AND US DOLLARS 0.6 BILLION WORTH OF REAL ESTATE PROPERTY IN HONG KONG IN 1987 AND 1988 RESPECTIVELY. IN 1989, THE AMOUNT INVESTED BY THE JAPANESE INCREASED TO US DOLLARS 1.44 BILLION OUT OF TOTAL PURCHASES OF US DOLLARS 1.92 BILLION FROM ALL FOREIGN AND DOMESTIC SOURCES.
11. THE JAPANESE ALSO HAVE AN IMPORTANT FOOTHOLD IN HONG KONG'S RETAIL SECTOR. ACCORDING TO NOMURA RESEARCH INTERNATIONAL, JAPANESE DEPARTMENT STORES ACCOUNT FOR ABOUT 40 PER CENT OF TOTAL DEPARTMENT STORE SALES IN HONG KONG.
12. THE JAPANESE PRESENCE IN HONG KONG'S CONSTRUCTION SECTOR IS ALSO SAID TO BE PROMINENT, BUT WE DO NOT HAVE ANY SYSTEMATIC
INFORMATION ON THIS.
COMMENT
13. AGAINST THE BACKGROUND OF THE WEAK PERFORMANCE OF JAPAN'S STOCK MARKET,'RISING INTEREST RATES, TIGHTER MONETARY POLICIES, RISING DOMESTIC INFLATION AND THE RELATIVELY WEAK YEN EARLY THIS YEAR, JAPANESE BUSINESSES ARE NOW OPERATING IN A DIFFICULT ENVIRONMENT AND ARE MORE CAUTIOUS IN OUTWARD INVESTMENT. THEY MAINTAIN A CAUTIOUS BUT LONG-TERM VIEW ON HONG KONG, AND ALWAYS SEE THE TERRITORY IN THE CONTEXT OF THE PRC. THUS, INVESTMENTS IN HONG KONG ARE SEEN NOT AS ENDS IN THEMSELVES BUT WITH A VIEW TO EXTENDING INTO CHINA. A PERHAPS DISPROPORTIONAL AMOUNT OF ATTENTION IS PLACED ON EVERY PRC STATEMENT CONCERNING HONG KONG. BUT THE RESUMPTION OF YEN 810 BILLION LOAN TO THE PRC WILL BE REGARDED AS THE JAPANESE GOVERNMENT'S ''ADMINISTRATIVE GUIDELINE'' FOR RESUMING INVESTMENTS IN CHINA. THIS COULD INDIRECTLY BENEFIT HONG KONG.
14. DESPITE THE SHRINKAGE IN OPERATING ENVIRONMENT, WHICH IS A WORLDWIDE PHENOMENON, THERE HAS BEEN NO MARKED CHANGE IN THE ATTITUDE OF JAPANESE INVESTORS TO INVESTMENT HERE. THE CONTINUED RAPID GROWTH IN THE ACTIVITIES OF JAPANESE INSTITUTIONS SHOWS THAT THEY ARE STILL VERY BULLISH ABOUT INVESTMENT IN HONG KONG.
WILSON
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