TNAG-2792-FCO40-4031-Relations-between-Hong-Kong-and-China-1993 — Page 67

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11

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of the banks in

with banks rose by

quarter

to

Reflecting

the

relative inability

only

4.5%

during

the

second

attracting funds, residents' deposits

Rmb 1,278.9 billion (15).

12.

In a move to restore financial discipline as well

as to restrain credit, in early July the Chinese government

announced, as part of the "16-point plan", specific

with a view to lifting interest rates on deposits, unauthorised fund-raising activities by non-bank institutions, and recalling loans which had been

to speculative ventures.

Within the short

measures

banning

financial

diverted

duration

а

to

since their implementation, these measures seemed

to have achieved some initial success. They yielded a faster growth in deposits, a fall in loans outstanding, and

re-channelling of funds

projects emphasized by the

While more positive results can be expected as

these measures are sustained, fundamental and lasting improvement will come about only with thorough and radical

reforms in the entire banking and financial system.

state.

13.

swap

in

In the foreign exchange adjustment centres (or centres), the Renminbi was traded in very low turnover

against the US dollar within a narrow range of Rmb 8.0-8.3

per US$ between March and May 1993, following the imposition

February of certain administrative

restrictions on the foreign exchange transactions, such as

price ceilings and trading limits.

In order to bring

transactions back from the black market to the foreign

exchange adjustment centres, on 1 June the government announced that the price ceiling restriction was removed. This led to a resurgence in the volume of transactions in the foreign exchange adjustment centres, but along with it

This followed an increase of 6.0% during the first quarter of 1993, and increases of 9.3%, 4.9%,

(15)

and

6.4% respectively.

during the

3.9%

four quarters of 1992

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