Subject: CND-EP Special for Pacific Area, June 23, 1990

From: <yawei>
Date: Sat, 23 Jun 90 11:06:37 -0500

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=====================  Europe / Pacific Section (CND-EP) =====================
                                 June 23, 1990

                  Special Issue for CND Readers in Pacific Area
                (This issue is distributed to Pacific Area only)

---------------------------- Table of Contents ---------------------------
No. Subject                                                     # of Lines

1. Thailand Wants US Pressure on China..................................20

2. Hongkong Ponders Its Future as Gateway to China - Some See Bigger 
   Role for Colony as Taipei, Soeul Boost Ties with Beijing............110
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1. Thailand Wants US Pressure on China
====================================================================(20 lines)
>From: Young Chul KIM <[email-masked]>
Source:  translated from Le Monde, 6/17/90

Bangkok Asks Washington to Apply Pressure on Beijing

On his official visit to Washington, Thursday June 14, the Thai Prime
Minister Mr. Chatichai Choonhavan asked Mr. George Bush to put pressure
on China to stop its weapons delivery to Khmers Rouges. During a two
hour meeting with the Prime Minister from Bangkok, according to US
Assistant Secretary of State Mr. Richard Solomon, President Bush had
reaffirmed his firm stance that no Chinese arms should end up in the
hands of the Khmers Rouges -- an objective judged to be somewhat
difficult to achieve through current relations between Washington
and Beijing. Meanwhile, the Sino-Vietnamien negotiations on Cambodia
seems to have reached a dead-end. According to diplomatic sources in
Hanoi, the Chinese envoy Mr. Xu Dunxin's stay in the Vietnamese capital
has not led to a reconciliation of the two countries' positions.

Mr. Xu Dunxin, the Chinese vice-minister of foreign affairs in charge
of Cambodian affairs, left Hanoi on Thursday after a 4-day visit,
heading for Ho-Chi-Minh City and Bangkok.
==============================================================================

2. Hongkong Ponders Its Future as Gateway to China - Some See Bigger 
   Role for Colony as Taipei, Soeul Boost Ties with Beijing
====================================================================(110 lines)
>From: CND Correspondent "Charles P. Mok" <[email-masked]>
Source: The Straits Times Weekly Overseas Edition, Singapore, June 9, 1990
(This is an excerpt)
By Foo Choy Peng, Hongkong Correspondent

When China plays host to the Asian Games in Beijing in September....the Chinese
capital is also likely to be the scene of several sideshows....

These sideshows will have an impact on Hongkong as an economic go-between for
the Chinese mainland and ...Taiwan and South Korea.  Taiwan has announced that
it will use Cathay Pacific Airways to fly its athletes to the Games, in a move
that is expected to be the catalyst for regular flights across the Taiwan 
Strait.

....

Since the beginning of the year, Taiwanese businessmen, gripped with the 
"mainland fever," have been holding up hopes of direct trade and investment
with the mainland.

And South Korea, which has made diplomatic overtures to China, will take
advantage of the Games to shore up its link with Beijing.

So while China has emphatically said there iss no question of Seoul having a
consular office in Beijing for the time being, it has opened up Shandong
province as a gateway for South Korean businessmen to trade with the Chinese.

The winds of change sweeping through North-east Asia have sparked off fears
that Hongkong's future as an economic go-between is less than promising.

Ye others believe that the promise of improved ties between the mainland and
the two neighbours will mean even more business for Hongkong.

....

Last year, some US$3.8 billion worth of indirect trade between China and 
Taiwan passed through Hongkong.  This year, the volume is expected to exceed
US$4 billion.

....Mr. Ting Kein, head of the Hongkong-Taiwan Trade Promotion Council.... said
ports in China are still so under-developed that it was highly uneconomical to
ship goods directly across the Taiwan Strait....

....

Even Mr. Wang Yungching, Taiwan's leading industrialist who is planning a US$7 
billion investment project in Fujian, has reportedly said that because of 
the complexities in China trade, business has to be conducted through his
Hongkong office.

The other problem is that Taiwanese shippers could run into banking problems
as letters of credit for mainland trade are now handled only by certain banks
in Hongkong.

Also, Taiwan's banking laws are so archaic that it is questionable that the 
network could handle the big volume of such trade, according to Mr. David
O'Rear, Business International's associate director (North Asia).

Because of the current ban on direct flights, Taiwanese visitors fly through
Hongkong to China.  Last year, 1.13 million Taiwanese visited Hongkong, of 
which about 540,000 entered China.

The Taiwanese, estimated Mr. Ting, spent about US$800 million during their
stay in Hongkong last year.

He said the opening of direct flights would not hurt the British colony too
badly as most of those Taiwanese who enter China usually pass through
Hongkong on transit only.

....

Broking house S.G. Warburg...believes that Taiwanese tourist market is more
likely to expand in the long run than simply be redistributed away from 
hongkong when direct flights across the Taiwan Strait start.

Also, the frequency and availability of flights on the Taipei-Hongkong route,
about 30 a week, would still make it convenient for people to enter China
via the British colony.

....

Taiwan (indirect) investment (in China) hit about US$1 billion last year and 
should go up by US$2 billion by the end of this year.

No one knows for sure how many Taiwanese companies have set up in China.  The
estimates run from 1,000 to 2,500.

Mr. Ting believes that about 80 per cent of the ... investment ... are 
channelled through subsidiaries or shell companies in Hongkong.

Even if Taipei permits direct investment in China, he believes that most 
would prefer to do so through Hongkong - for one major reason.

Because Taiwan has no representation in China, investments by Taiwanese
investors are not legally protected.

....

So unless China and Taiwan work out some form of agreement, it is safer to 
go through Hongkong companies, at least before 1997.

If the barriers to trade and investment are removed eventually between China
and Taipei, an ecomomic bloc comprising Taiwan, Southern China, Hongkong and,
to some extent, Macau, could emerge.

Such a block...will generate much more business for everyone.

...Hongkong...would also gain from the improved ties between South Korea and
the mainland.

At present time, about 70 per cent of the trade between China and South Korea
is done through Hongkong, according to Mr. S.M. Choi, the Korea Foreign Trade
Association's research and trade promotion manager (Hongkong branch).

Total trade between the two reached US$3.1 billion last year.  Because of 
China's austerity drive, he thinks the trade volume will decline slightly 
this year.

But improved ties between the two countries would mean a bigger role for 
Hongkong.

Indeed, the very reasons why so many multinational companies from the United
States, Europe and Japan continue to use Hongkong as a springboard to China
will continue to be the attraction for Taiwanese and South Korean companies
to use Hongkong as a middleman.

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