Translation from Wirtschaftswoche, 26 November 1993
INVESTORS BEWARE!
Although Chancellor Helmut Kohl paid a visit to Hong Kong during his China tour, German diplomats have been giving warnings to potential investors in the free enterprise enclave.
When the British crown colony reverts to China on 1 July 1997, "the existing system of justice will disintegrate" predicts Wolfgang Göttelmann, the German Consul-General in Hong Kong in comments to representatives of the German financial and economic sector visiting the Asian metropolis of financial services. "Nepotism and corruption will be the order of the day" according to Göttelmann. Furthermore, Peking' s
Peking's assurance that Hong Kong would remain for the foreseeable future independent with regard to financial and fiscal policy was "hardly credible". A strong increase in income tax from its present very low levels is much more likely to occur. In addition, there was considerable doubt as to whether the city state which at the moment contributes 1/5 to China's gross national product, would be able to survive the loss of confidence by foreign investors and companies.
Those in the know are tending to recommend investment in the special economic areas on the mainland where China's government is making its first experiments with the market economy. Tyll Necker, president of the Federation of German Industry, shares this view. "There is more potential" (than in Hong Kong).
British Consulate-General
Frankfurt
2 December 1993
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