6. FIRST THE GENERAL WAY IN WHICH THEY REGARD HONG KONG. YOU KNOW THE LONG-STANDING CHINESE POSITION ON HONG KONG, THAT IT IS PART OF CHINA AND A PROBLEM THAT WILL BE SOLVED WHEN THE TIME IS RIPE. BUT THE POINT THAT WAS REPEATEDLY STRESSED TO US AT ALL LEVELS WAS THE IMPORTANCE WHICH THE CHINESE LEADERS ATTACH TO THE VALUE OF HONG KONG, TO THE CONTRIBUTION THAT IT COULD MAKE TO THE MODERNISATION PROGRAMMES, TO THE IMPORTANCE OF MAINTAINING INVESTMENT AND CONFIDENCE IN HONG KONG, AND OF INCREASED HONG KONG INVESTMENT IN CHINA, INDEED VICE PREMIER DENG XIAOPING FORMALLY REQUESTED ME TO ASK INVESTORS IN HONG KONG TO PUT THEIR HEARTS AT EASE: HE ALSO ASKED FOR ENCOURAGEMENT OF INVESTMENT IN GUANGZHOU PROVINCE AND THE REST OF CHINA, YOU WILL HAVE SEEN FROM PRESS REPORTS THAT IN DINNER SPEECHES LI QIANG STRESSED THE SAME POINTS ABOUT THE VALUE OF BROADER PROSPECTS IN ECONOMIC COOPERATION BETWEEN HONG KONG AND THE REST OF CHINA, AND OF HONG KONG INVESTMENT IN CHINA. AT ALL LEVELS THEY CONSTANTLY REITERATED THE SAME THEME: NAMELY THE IMPORTANCE TO THEM OF THE ROLE WHICH HONG KONG IS PLAYING AND WILL PLAY AS A RESULT OF THE

HIGH LEVEL OF ITS INDUSTRIAL, COMMERCIAL AND FINANCIAL DEVELOPMENT, THIS WAS A FRANK STATEMENT OF CHINA'S NEEDS, BUT ONE CAN ALSO READ

INTO IT A MOST ENCOURAGING MESSAGE.

7. NOW FOR SOME OF THE DETAIL. FIRST OF ALL TOURISM. THEY SEE CONSIDERABLE SCOPE FOR COOPERATION IN OUR RESPECTIVE TOURIST INDUSTRIES. THEY APPEAR TO RESPECT OUR OWN INDUSTRY AND BELIVE THEY CAN LEARN FROM IT IN THE RAPID EXPANSION OF THEIRS. THEY WOULD WELCOME COOPERATION IN THE FINANCING, CONSTRUCTION, MANAGEMENT AND STAFF TRAINING OF SOME OF THEIR NEW HOTELS: AND ALSO IN THE PLANNING OF CHINA TOURS BEGINNING AND ENDING IN HONG KONG. THE CONSTRUCTION OF HOTELS APPARENTLY INVOLVES BOTH THE CENTRAL TRAVEL AND TOURIST AUTHORITY IN PEKING AND LOCAL PLANNING AUTHORITIES. RECONCILING THE RESPECTIVE IDEAS TAKES TIME, AND THEY ASKED ME TO ASK OUR SYNDICATES ENGAGED IN NEGOTIATING

HOTEL CONTRACTS TO BE PATIENT.

8. A WORD ABOUT COMMUNICATIONS. HONG KONG IS THE BEST DEEP-WATER PORT AVAILABLE TO GUANGDONG, AND ALSO THE TERMINUS OF THE SOUTH CHINA RAILWAY SYSTEM. IT ALSO IS A CENTRE OF WORLD-WIDE SEA AND AIR TRANSPORT, OBVIOUSLY THESE ASPECTS ARE IMPORTANT TO CHINA. THE THROUGH-TRAIN IS IMPORTANT IN ITSELF AND ALSO AS A BEGINNING OF AN IMPROVED TRAIN SERVICE IN GENERAL. THEY CLEARLY WISHED

TO PROCEED FAIRLY SOON TO THROUGH-FREIGHT SERVICES AND

THIS IS ALREADY BEING EXAMINED.

/9. WE SAW

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