Keep Us Strong WikiLeaks logo

Currently released so far... 97115 / 251,287

Articles

Browse latest releases

Browse by creation date

Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z

Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
ETRD EAGR ETTC EAID ECON EFIN ECIN EINV ELAB EAIR ENRG EPET EWWT ECPS EIND EMIN ELTN EC ETMIN EUC EZ ET ELECTIONS ENVR EU EUN EG EINT ER ECONOMICS ES EMS ENIV EEB EN ECE ECOSOC EK ENVIRONMENT EFIS EI EWT ENGRD ECPSN EXIM EIAD ERIN ECPC EDEV ENGY ECTRD EPA ESTH ECCT EINVECON ENGR ERTD EUR EAP EWWC ELTD EL EXIMOPIC EXTERNAL ETRDEC ESCAP ECO EGAD ELNT ECONOMIC ENV ETRN EIAR EUMEM ENRGPARMOTRASENVKGHGPGOVECONTSPLEAID EREL ECOM ECONETRDEAGRJA ETCC ETRG ECONOMY EMED ETR ENERG EITC EFINOECD EURM EENG ERA EXPORT ENRD ECONEINVETRDEFINELABETRDKTDBPGOVOPIC EGEN EBRD EVIN ETRAD ECOWAS EFTA ECONETRDBESPAR EGOVSY EPIN EID ECONENRG EDRC ESENV ETT EB ENER ELTNSNAR ECHEVARRIA ETRC EPIT EDUC ESA EFI ENRGY ESCI EE EAIDXMXAXBXFFR EETC ECIP EIAID EIVN EBEXP ESTN EING EGOV ETRA EPETEIND ELAN ETRDGK EAIDRW ETRDEINVECINPGOVCS EPEC ENVI ELN EAG EPCS EPRT EPTED ETRB EUM EAIDS EFIC EFINECONEAIDUNGAGM EAIDAR ESF EIDN ELAM EDU EV EAIDAF ECN EDA EXBS EINTECPS ENRGTRGYETRDBEXPBTIOSZ EPREL EAC EINVEFIN ETA EAGER EINDIR ECA ECLAC ELAP EITI EUCOM ECONEFINETRDPGOVEAGRPTERKTFNKCRMEAID EARG ELDIN EINVKSCA ENNP EFINECONCS EFINTS ECCP ETC EAIRASECCASCID EINN ETRP EAIDNI EFQ ECOQKPKO EGPHUM EBUD ECONEINVEFINPGOVIZ ENERGY ELB EINDETRD EMI ECONEFIN EIB EURN ETRDEINVTINTCS EIN EFIM ETIO ELAINE EMN EATO EWTR EIPR EINVETC ETTD ETDR EIQ ECONCS EPPD ENRGIZ EISL ESPINOSA ELEC EAIG ESLCO EUREM ENTG ERD EINVECONSENVCSJA EEPET EUNCH ECINECONCS ETRO ETRDECONWTOCS ECUN EFND EPECO EAIRECONRP ERGR ETRDPGOV ECPN ENRGMO EPWR EET EAIS EAGRE EDUARDO EAGRRP EAIDPHUMPRELUG EICN ECONQH EVN EGHG ELBR EINF EAIDHO EENV ETEX ERNG ED
KMDR KPAO KPKO KJUS KCRM KGHG KFRD KWMN KDEM KTFN KHIV KGIC KIDE KSCA KNNP KHUM KIPR KSUM KISL KIRF KCOR KRCM KPAL KWBG KN KS KOMC KSEP KFLU KPWR KTIA KSEO KMPI KHLS KICC KSTH KMCA KVPR KPRM KE KU KZ KFLO KSAF KTIP KTEX KBCT KOCI KOLY KOR KAWC KACT KUNR KTDB KSTC KLIG KSKN KNN KCFE KCIP KGHA KHDP KPOW KUNC KDRL KV KPREL KCRS KPOL KRVC KRIM KGIT KWIR KT KIRC KOMO KRFD KUWAIT KG KFIN KSCI KTFIN KFTN KGOV KPRV KSAC KGIV KCRIM KPIR KSOC KBIO KW KGLB KMWN KPO KFSC KSEAO KSTCPL KSI KPRP KREC KFPC KUNH KCSA KMRS KNDP KR KICCPUR KPPAO KCSY KTBT KCIS KNEP KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG KNNB KGCC KINR KPOP KMFO KENV KNAR KVIR KDRG KDMR KFCE KNAO KDEN KGCN KICA KIMMITT KMCC KLFU KMSG KSEC KUM KCUL KMNP KSMT KCOM KOMCSG KSPR KPMI KRAD KIND KCRP KAUST KWAWC KTER KCHG KRDP KPAS KITA KTSC KPAOPREL KWGB KIRP KJUST KMIG KLAB KTFR KSEI KSTT KAPO KSTS KLSO KWNN KPOA KHSA KNPP KPAONZ KBTS KWWW KY KJRE KPAOKMDRKE KCRCM KSCS KWMNCI KESO KWUN KPLS KIIP KEDEM KPAOY KRIF KGICKS KREF KTRD KFRDSOCIRO KTAO KJU KWMNPHUMPRELKPAOZW KEN KO KNEI KEMR KKIV KEAI KWAC KRCIM KWCI KFIU KWIC KCORR KOMS KNNO KPAI KBWG KTTB KTBD KTIALG KILS KFEM KTDM KESS KNUC KPA KOMCCO KCEM KRCS KWBGSY KNPPIS KNNPMNUC KWN KERG KLTN KALM KCCP KSUMPHUM KREL KGH KLIP KTLA KAWK KWMM KVRP KVRC KAID KSLG KDEMK KX KIF KNPR KCFC KFTFN KTFM KPDD KCERS KMOC KDEMAF KMEPI KEMS KDRM KEPREL KBTR KEDU KNP KIRL KNNR KMPT KISLPINR KTPN KA KJUSTH KPIN KDEV KTDD KAKA KFRP KWNM KTSD KINL KJUSKUNR KWWMN KECF KWBC KPRO KVBL KOM KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG KEDM KFLD KLPM KRGY KNNF KICR KIFR KM KWMNCS KAWS KLAP KPAK KDDG KCGC KID KNSD KMPF KPFO KDP KCMR KRMS KNPT KNNNP KTIAPARM KDTB KNUP KPGOV KNAP KNNC KUK KSRE KREISLER KIVP KQ KTIAEUN KPALAOIS KRM KISLAO KWM KFLOA
PHUM PINR PTER PGOV PREL PREF PL PM PHSA PE PARM PINS PK PUNE PO PALESTINIAN PU PBTS PROP PTBS POL POLI PA PGOVZI POLMIL POLITICAL PARTIES POLM PD POLITICS POLICY PAS PMIL PINT PNAT PV PKO PPOL PERSONS PING PBIO PH PETR PARMS PRES PCON PETERS PRELBR PT PLAB PP PAK PDEM PKPA PSOCI PF PLO PTERM PJUS PSOE PELOSI PROPERTY PGOVPREL PARP PRL PNIR PHUMKPAL PG PREZ PGIC PBOV PAO PKK PROV PHSAK PHUMPREL PROTECTION PGOVBL PSI PRELPK PGOVENRG PUM PRELKPKO PATTY PSOC PRIVATIZATION PRELSP PGOVEAIDUKNOSWGMHUCANLLHFRSPITNZ PMIG PREC PAIGH PROG PSHA PARK PETER POG PHUS PPREL PS PTERPREL PRELPGOV POV PKPO PGOVECON POUS PGOVPRELPHUMPREFSMIGELABEAIDKCRMKWMN PWBG PMAR PREM PAR PNR PRELPGOVEAIDECONEINVBEXPSCULOIIPBTIO PARMIR PGOVGM PHUH PARTM PN PRE PTE PY POLUN PPEL PDOV PGOVSOCI PIRF PGOVPM PBST PRELEVU PGOR PBTSRU PRM PRELKPAOIZ PGVO PERL PGOC PAGR PMIN PHUMR PVIP PPD PGV PRAM PINL PKPAL PTERE PGOF PINO PHAS PODC PRHUM PHUMA PREO PPA PEPFAR PGO PRGOV PAC PRESL PORG PKFK PEPR PRELP PREFA PNG PGOVPHUMKPAO PRELECON PINOCHET PFOR PGOVLO PHUMBA PRELC PREK PHUME PHJM POLINT PGOVPZ PGOVKCRM PGOVE PHALANAGE PARTY PECON PEACE PROCESS PLN PRELSW PAHO PEDRO PRELA PASS PPAO PGPV PNUM PCUL PGGV PSA PGOVSMIGKCRMKWMNPHUMCVISKFRDCA PGIV PRFE POGOV PEL PBT PAMQ PINF PSEPC POSTS PHUMPGOV PVOV PHSAPREL PROLIFERATION PENA PRELTBIOBA PIN PRELL PGOVPTER PHAM PHYTRP PTEL PTERPGOV PHARM PROTESTS PRELAF PKBL PRELKPAO PKNP PARMP PHUML PFOV PERM PUOS PRELGOV PHUMPTER PARAGRAPH PERURENA PBTSEWWT PCI PETROL PINSO PINSCE PQL PEREZ PBS

Browse by classification

Community resources

courage is contagious

Viewing cable 07HONGKONG1931, HK ECONOMISTS ADVISE CHINA AGAINST SOVEREIGN

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs

Understanding cables
Every cable message consists of three parts:
  • The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
  • The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
  • The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
To understand the justification used for the classification of each cable, please use this WikiSource article as reference.

Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #07HONGKONG1931.
Reference ID Created Released Classification Origin
07HONGKONG1931 2007-07-23 08:10 2011-08-23 00:00 UNCLASSIFIED Consulate Hong Kong
VZCZCXRO9544
RR RUEHCN RUEHGH RUEHVC
DE RUEHHK #1931/01 2040810
ZNR UUUUU ZZH
R 230810Z JUL 07
FM AMCONSUL HONG KONG
TO RUEHC/SECSTATE WASHDC 2375
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHGP/AMEMBASSY SINGAPORE 3596
RUEHIN/AIT TAIPEI 4614
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
UNCLAS SECTION 01 OF 02 HONG KONG 001931 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EAP/CM AMY NICODEMUS AND EB/IFD/OMA DAVID MOORE, 
US TREASURY FOR HARSAAGER, WINSHIP, AND YANG 
 
E.O. 12958: N/A 
TAGS: ECON EFIN HK CH
SUBJECT: HK ECONOMISTS ADVISE CHINA AGAINST SOVEREIGN 
WEALTH FUND TRANSPARENCY, PRAISE CEPA AMENDMENTS 
 
1.  (SBU) Summary: A senior Hong Kong private-sector 
economist has been advising the Chinese government that a 
high degree of transparency is not in the best interest of 
China's State Foreign Exchange Investment Corporation (SIC), 
as it will subject the fund to political pressure and media 
second guessing.  HKMA officials thought that Treasury 
Assistant Secretary Lowery,s call for greater transparency 
in sovereign wealth funds was overly critical as the U.S. has 
long rebuffed Asian calls for greater transparency of large 
institutional investors like hedge funds. 
 
2.  (SBU) Investment banking executives are grateful for the 
market access commitments achieved in SED II.  Lack of 
regulatory transparency and predictability, along with equity 
caps and the lack of a clear mandate to allow minority 
shareholders management control of domestic firms remain 
their primary market access concerns.  HKMA officials noted 
the benefits of collaboration through the SED-JCCT and CEPA 
to gain greater access for foreign financial services firms 
and described amendments in the most recent CEPA increasing 
access in financial services, notably by: 1) reducing minimum 
asset requirements for Hong Kong banks to purchase strategic 
stakes in Chinese banks; 2) making it easier for foreign 
banks to qualify as "Hong Kong banks" and benefit from CEPA 
provisions; and 3) giving Hong Kong banks priority treatment 
in applications to open branches in west central and 
northeast China and in Guangdong Province.  End Summary. 
 
3.  (SBU) Beijing-based Treasury Financial Minister Counselor 
David Loevinger and Econoff Jim Mullinax met July 13 with 
several Hong Kong-based senior economists and representatives 
of international investment banks, fund managers, and the 
Hong Kong Monetary Authority (HKMA). 
 
============================================= ======= 
SIC: Transparency Makes Profitability Harder to Find 
============================================= ======= 
 
4.  (SBU) Hong Kong-based economists predicted that the SIC 
would have difficulty reaching profitability in the near 
term, given prospects for the RMB appreciating by up to 5% 
vis--vis the U.S. dollar over the next several years and the 
interest rate on Ministry of Finance bonds issued to finance 
the SIC expected to be about 4.5%.  (Comment:  We noted that 
there is not yet agreement in the Chinese government on 
whether the government,s claim in the SIC will be RMB or 
foreign currency denominated. End comment.)  To finance the 
SIC, Hong Kong economists we spoke to expect the Ministry of 
Finance to issue bonds to either a special purpose vehicle or 
a consortium of State-owned banks, which would then sell the 
bonds to the People,s Bank of China (PBOC).  To ensure 
market pricing, a small quantity of bonds could be auctioned 
publicly. 
 
5.  (SBU) One economist has advised the Chinese government 
that a high degree of transparency in the SIC would not be in 
China,s interest.  Regular reporting on the composition and 
performance of SIC investments would make it more difficult 
for the SIC to focus on maximizing long-run returns, 
subjecting it to greater political interference and media 
second-guessing.  In addition, a high degree of transparency 
would allow market players to discern SIC,s investment 
strategy and "front run" it.  The economist advised SIC's 
prospective management that Singapore,s Government 
Investment Corporation (GIC) and most of the world,s central 
banks do not make public the composition of investments or 
returns, suggesting that this was a good model for the SIC to 
follow.  HKMA officials believe U.S. Treasury Assistant 
Secretary Clay Lowery was too critical in his calls for 
 
SIPDIS 
greater transparency in sovereign wealth funds.  They noted 
the irony of the U.S. position advocating greater 
transparency in sovereign funds after having repeatedly 
rebuffed Asian calls for greater transparency in large 
institutional investors like hedge funds. 
 
============================================= ==== 
Export Misreporting Not a Factor in Trade Figures 
============================================= ==== 
 
6.  (SBU) The economists noted that expectations that RMB 
appreciation would slow Chinese export growth had proven 
unfounded thus far.  Based on a recent survey of firms, 
China,s State Administration for Foreign Exchange (SAFE) 
believes that disguised capital account transactions in the 
current account are relatively small, accounting for probably 
 
HONG KONG 00001931  002 OF 002 
 
 
less than 1% of the current account surplus.  There are 
incentives for both under-reporting (tax avoidance) and 
over-reporting (access to foreign currency to speculate on 
RMB appreciation) of export receipts.  According to SAFE, 
pre-payments for export receipts (another common tool used to 
gain illicit access to foreign exchange) are down 40%. 
 
============================================= =============== 
Equity Caps, Predictability, Control Top Securities Concerns 
============================================= =============== 
 
7.  (SBU) The securities company executives we spoke with are 
grateful for the market access commitments achieved in SED 
II, particularly the removal on the moratorium on new 
securities licenses and the ability for foreign securities 
JVs to expand into brokerage and proprietary trading. 
However, equity caps and the lack of regulatory transparency 
and consistency remain their primary concerns.  The lack of 
regulatory predictability makes long-term planning difficult. 
 Firms cited as examples the moratorium and the ad-hoc nature 
of foreign acquisitions of Chinese-invested securities firms 
to date.  To the bankers, a more restrictive but transparent 
and predicable regulatory regime would be preferable to a 
potentially less restrictive but opaque and volatile one. 
 
8.  (SBU) While the raising of equity caps in securities 
remains a priority, and raising the caps even to 49% would be 
helpful, the promulgation of regulations which clearly give 
minority shareholders the right to managerial control would 
be highly welcome, as this appeared to be a major stumbling 
block in the UBS purchase of Beijing Securities. 
Promulgating clear regulations on the ability of financial 
services firms to provide private banking services is also a 
key concern.  Firms advised U.S. officials to point out to 
Chinese counterparts that the current environment gives a 
privileged market position to three foreign securities firms, 
enhancing their ability to extract rents. 
 
============================================= == 
CEPA Amendments Ease HK Firms' Entry into China 
============================================= == 
 
9.  (SBU) Senior officials of the HKMA described recent 
amendments to the Mainland/Hong Kong CEPA on financial 
services.  First, while firms still need five years operating 
experience in Hong Kong to qualify as a Hong Kong financial 
services firm and gain the benefits of CEPA, they can now 
count up to two years operating as a foreign affiliated 
branch (with the rest as an incorporated subsidiary) to meet 
the requirement.  Under previous rules, a bank needed to have 
been incorporated in Hong Kong for at least five years. 
Second, the minimum asset requirement for Hong Kong banks to 
acquire a strategic stake in a mainland bank has been reduced 
from US$10 billion to US$6 billion.  Finally, a new "Green 
Lane" procedure will give Hong Kong banks priority treatment 
in considering license applications to set up branches in the 
central western and northeastern regions of China and, most 
importantly, in Guangdong Province. 
Marut