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China also visited Hong Kong: Hong Kong was very attractive to tourists. China had its own attractions: vast territory with cultural and historical relics which needed to be developed for tourism. There were excellent opportunities for cooperation. In the next 5 years if more hotels were built in Hong Kong more tourists could be advised to travel. there from China. There was now talk of air services from Hong Kong to Shanghai and Hangzhou. His personal hope was that there would soon be flights between Feking and Hong Kong. The present problem was the limited availability of hotel accommodation in Peking. At first he had thought it was simply a question of building more hotels but in fact it was not so simple. There was the question of the supply of utilities and there were management and construction problems left over from the Gang of Four period. Capital expenditure was now required on a large scale.
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Another problem was communications. Apart from the question of travelling in and out of China, there were also internal problems. The development of CAAC had not kept up with the development of the tourist industry. Tourists were not willing on the whole to use trains to travel within China because they took too long.
5. On the administration side hotel management was not yet ready for quick development. Hong Kong was a capitalist society based on the principle of competition and it was therefore certain that bad managers did not survive, but in China where there was one travel monopoly even people who did not do their work properly had to be taken account of. Now it was the intention to follow the principle of socialist society "from each according to his talents to each according to his labour." The management and staff members of successful hotels should be rewarded from the profits that they made. In other hotels which did not work as well, they should be paid less and in unsuccessful cases the management should be replaced. In this way the administration should be improved. It was easy to build a hotel but difficult to establish good management. The Governor pointed out that both labour and management in hotels needed to be highly skilled; specialist equipment was also necessary.
6. Mr Lu said that when he stayed in Hong Kong recently he had met Mr Newbiggin and Mr Payne of the Hong Kong travel association. He hoped to keep in touch with them. The Governor had spoken to them before coming to China. They had emphasised that tourism was not only a question of travelling back and forth. It had to be organised so that when one group of people left a particular place, others were ready to take their place. Hong Kong was at one end of this process in relation to China, and therefore there was a need for close cooperation. He asked whether Mr Lü could give him the expected number of tourists coming to China in the next few years.
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