SURESH DEVI w. di
HL SECRET
M: Sixent.
Mr Evans (Far Eastern Department)
nee
letter of
تے
HONG KONG MASS TRANSIT SYSTEM
1.
You will wish to see the attached copy of a letter from Mr Glaves-Smith, who is the Under Secretary responsible in the DTI for the Hong Kong Mass Transit System negotiations.
2. The UK consortium have picked up the idea that the Hong Kong Government would welcome Chinese Government participation in a bid. Very likely the source of this idea was Mr Sandberg who was part of Mr Haddon-Cave's negotiating team in London and who, as you know, has previously voiced the idea in Hong Kong despite discouragement from the Chinese and from the Hong Kong Government. We have recently written to Mr Stratton to point out that Mr Sandberg still does not seem disabused of the idea's worth and suggesting that he should be firmly told to lay off. I think we should do the same in London with the consortium. We know that the Chinese are not attracted by the idea but if the consortium approached them and they changed their minds it might be embarrassing and difficult to bear Chinese participation thereafter.
3. I take it that it is still your view that direct Chinese participation in the scheme is undesirable? It is certainly mine. It would give the Chinese Government a direct stake in a Hong Kong scheme which would, for example, strengthen their case for an "official representative", but it would not give them any additional reason for supporting the British presence in Hong Kong. Indeed it might at some stage give them a marginal pretext for intervention for the classic imperialist reason of "protecting their investment".
4. I attach the draft of a letter from me to Mr Glaves-Smith on which I should be grateful for your comments. We obviously cannot explain how we know some of the things that we do, but I do not think this need prevent us from stating our conclusions.
5. If you agree I will submit the letter to Mr Wilford before despatch.
DCPS
A C Stuart
Hong Kong & Indian Ocean Department
2 January 1973
Copy to:
Mr D M Kerr (Financial Relations Dept)
CONFIDENTIAL SECRET
H