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South China Sea Bubble?

Red chips have dominated headlines and share trading in Hong Kong in 1997. But who controls these new mainland-owned hongs? And how can analysts and investors value their fast-growing assets. Steven Irvine visits the new taipans.

A chat with a taipan

The man bankers talk to

It's 10.27am on a rain-drenched morning in mid-June, less than two weeks before the handover of Hong Kong to China. It is the annual general meeting of a China-backed company in one of the territory's top hotels.

The company is a record-breaker. When it listed in 1993 it locked up a staggering HK$240 billion ($31 billion) of investors' money - more than all the notes and coins in circulation in the former colony, now a special administrative region of China.

In fact ever since it was listed the company has traded below its issue price. Principally a manufacturer of cars, it is currently producing just enough to keep its factory in Guangzhou open. Last year's losses soared 144%. Its joint venture partner, Peugeot of France, has pulled out. Are there furious investors barracking directors? How many hours will the AGM last? These are the questions Euromoney puts to a spokesman for Denway Investments as we wait outside.

He barely has time to answer. The AGM is over in 11 minutes. The whole thing is conducted in Cantonese.

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