Xinhua is losing money and investing in Internet ventures in Hong Kong to pay its operating expenses on the mainland. Zhang Guoliang, Asia-Pacific director of the official news agency, said cuts in income from the Beijing Government, and the fact it did not charge for its news service on the mainland, meant it had to cover expenses with business profits. 'In China, TV and newspapers . . . are using our information and they're making money. But we're losing it. So we need to make money,' he said. Mr Zhang said that faced with the need to generate revenue through business, Hong Kong was a natural place to invest. The South China Morning Post last week published an account of Xinhua's dotcom dealings, which estimated their value at $3 billion and reported concerns of a conflict of interest. Based on information provided by Mr Zhang, it now appears that its portfolio may be worth about $5 billion. This is dominated by its $4 billion stake in Chinadotcom. Although Xinhua is the state news agency, Mr Zhang said that since 1985 annual revenue from the Government had been reduced with the aim of making it financially independent. He said he realised there was 'some risk' attached to Xinhua's activities, but as its business experience grew it was becoming more resistant to it.