VIII.     TRADE AND PROJECT FINANCING


A.   Brief Description of Banking System

     Hong Kong has an open financial system, with no controls on currency
     movements.   Hong Kong is a major world financial center, with 172
     fully licensed banks operating in the territory offering complete
     banking facilities.


B.   Foreign Exchange Controls affecting trading

     The local currency, the Hong Kong Dollar (HKD), is freely convertible
     and there are no foreign exchange controls.


C.   General Financing Availability

     Hong Kong is the world's tenth-largest merchandise exporter and the
     principal conduit for trade and capital flows to and from China.
     Eighty-one of the world's top 100 banks operate in the territory.  At
     yearend 1993 there were 371 authorized institutions (licensed banks,
     restricted license banks and deposit taking companies) and 142 local
     representative  offices of foreign banks.

     Commercial trade financing is readily available in Hong Kong for
     qualified customers.  Bank loans have been increasing at on average
     rate of 18 percent per year for the last five years.  In 1993, foreign
     currency lending totalled USD 204 billion.  All licensed banks are
     authorized to provide loans to residents and non-residents in the
     currency of their choice.  Letters of credit and other financial
     instruments are widely used to protect participants in trade
     arrangements.  All banks maintain close working relationships with
     correspondent banking institutions.  The financial system is highly
     developed and efficient.  Hong Kong has the sixth largest foreign
     exchange reserves in the world.


D.   How to Finance Exports/Methods of Payment

     The preferred method of quoting is "CIF" or "C and F" in HKD.  The
     U.S. dollar and other freely convertible currencies may be accepted
     for bids and pro forma invoicing.

     Terms of payment depend on the relative negotiating strength of the
     buyers and sellers.  US suppliers should seek to obtain letters of
     credit or sight draft terms when dealing with buyers who are not well
     known to them.  Asking for a letter of credit is a standard business
     practice, and your potential customer will not interpret this as a sign
     of mistrust.

     The importance of trade finance to the territory has resulted in
     a high level of bank efficiency in providing import payment
     services.  Letters of credit, document collection and
     international remittance are widely available.  All licensed banks
     are authorized to provide loans to residents and nonresidents.
     Risk of financing receivables can be readily evaluated via
     locally available credit information.  Prospective exporters
     should make use of banking relationships to determine credit
     risk.


E.   Types of Available Export Financing and Insurance

     U.S. ExIm Bank offers both trade financing and insurance for U.S.
     exports.  Commercial vendors are also readily available.


F.   Project Financing Availability

     Hong Kong is not a recipient of official development assistance.
     Projects are financed on commercial terms.  The U.S. Trade and
     Development Agency programs are available for Hong Kong.  Hong
     Kong is also a major center for commercial project financing for
     China.


G.   List of Banks with Correspondent U.S. Banking Arrangements

     Please refer to the appendix.