Announcement of IFC to Help Finance Major Electronics Joint Venture in China November 29, 1988

nternational Finance Corporation November 29, 1988 Monique Amaudry FOR RELEASE: Press release no. 89/23 CONTACT: (202) 473 93 31 IFC Helps Finance Major Electronics Joint Venture in China The International Finance Corporation (IFC) is providing a $15 million loan to help finance a $62 million joint venture project of Shenzhen Crown (China) Electronics Company Ltd. (SCEC) for the construction of a production and assembly plant which will manufacture consumer electronic products for export. IFC, a World Bank affiliate, is the largest source of direct project financing for private investment in developing countries. SCEC is a cooperative joint venture incorporated in 1987 between Meizhi Electronics Corporation (Meizhi), a private Chinese workers' cooperative and Crown Corporation, a medium-size Japanese electronics manufacturer. Meizhi has a successful record in performing assembly work on electrical and electronic products under contract for various Hong Kong and Japanese manufacturers. The new plant will be located in the Shenzhen Special Economic Zone, about 20 km from the Hong Kong border. When completed by June 1989, it will produce head-phone stereos, radio cassettes, various audio equipment incorporating compact disc units, and small television sets. Crown Corporation will provide technical and managerial know-how and marketing expertise. At full production, SCEC is expected to generate around $170 million in annual sales and employ 4,000 workers. Ninety-five percent of the production is to be exported, mainly to the U.S. and Europe. -2- IFC's long-term financing helped facilitate the completion of the financial plan and is expected to encourage more foreign investors in the area. The Shenzhen Special Economic Zone is the largest of China's special economic zones. These zones were established to attract foreign investment and technology, particularly for export-oriented investments. IFC made a previous investment in this zone in 1987 in the China Bicycles Company Limited. SCEC is IFC's fourth investment in a project in China. In addition to China Bicycles, which manufactures bicycles for export, IFC has also invested in a major automobile manufacturing plant, which is presently undergoing an expansion, and a venture capital fund to assist small and medium-size joint-venture enterprises.