MAINLAND enterprises would neither assume a leading position in different sectors nor enjoy any privileges in the territory after the sovereignty changeover in 1997, a senior Chinese official said yesterday. The remarks by a deputy director of the local branch of Xinhua (the New China News Agency), Ulan Mulun, follow a report that China wanted mainland enterprises to run more businesses in the lead-up to 1997 in a bid to boost confidence in the economy. Speaking at a lunch to celebrate the 95th anniversary of the Chinese General Chamber of Commerce, Mr Ulan said: 'To ensure the prosperity and stability of Hong Kong and serve the economic development of the mainland has long been the fundamental objective and principle of the mainland enterprises' development in Hong Kong. 'In other words, mainland enterprises do not develop in Hong Kong merely for profits. Nor are they here to compete for 'rice bowls' with other enterprises here. 'They are here to serve as the mainland's window on Hong Kong, as a bridge between the economies across the border,' Mr Ulan said. Vice-chairman of the chamber, Henry Wu, said Mr Ulan's remarks would be reassuring to businessmen in Hong Kong. Mr Ulan said mainland enterprises had been self-restrained in their involvement in development in Hong Kong. 'We require the China-controlled enterprises to observe Hong Kong laws and the 'rules of the game', and participate and compete on a level playing field as do other enterprises in Hong Kong,' he said. 'China-controlled enterprises would continue to survive and develop among fair competition with the best succeeding and the worst being eliminated.' Likening Hong Kong's economy to a 'big cake', Mr Ulan said mainland enterprises were in the territory not for a slice of the cake but to improve the cake. He said a preliminary study showed total assets of officially approved mainland enterprises stood at US$42.5 billion (HK$328.1 billion) as at the end of last year. Economists and businessmen generally believe mainland enterprises hold more assets and funds in Hong Kong through unofficial channels. Mr Ulan said statistics showed mainland enterprises accounted for about 20 to 25 per cent of the trade figures, bank deposits, insurance premiers and cargo transport in Hong Kong. The 63 mainland-controlled listed companies represented 4.5 per cent of total market capitalisation. The number of mainland enterprises in Hong Kong has mushroomed during the 1980s and this decade, standing now at 1,756. Mr Ulan said mainland enterprises should lay down a good foundation in Hong Kong to provide a strong support for the economic development in China as envisaged in the plans for the ninth five-year period and beyond. Enterprises would also be able to respond to the better investment climate after two years' consolidation in 1997.