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ask the Hong Kong Government to provide, free of charge, wharfage facilities and godowns for the railway and airport.
(a) Comment. A possible demand, although it might not be put forward in quite such simple terms. Provision of some facilities at special rates would be a reasonable quid pro quo for their agreement on leases. The danger would be that what we saw as a special concession for a limited number of facilities might be seen by them as a precedent for all land deals involving China. Should we agree to a large-scale provision of free or specially priced facilities for China, the local population would both be resent ful and doubt the ability of the Hong Kong Government to remain in effective control of the colony.
2.
(b) Response. We wish Hong Kong to play a major role in China's plans for modernisation. We wish to build up mutual economic benefit. We are prepared to provide a limited number of sites at a concessionary rate to achieve this end and as a special gesture. This agreement must, however, be limited to the specific facilities in question. Otherwise, since land in Hong Kong is scarce, others would legitimately complain.
3.
General economic demands. China asks for special treatment in land transactions for all directly-owned Chinese organisations, e.g. the Bank of China, China Resources, etc.
(a) Comment. Unlikely to be made as a specific demand but possible as a general point. Any general agreement to give special treatment to all Chinese-owned organisations would be dangerously open-ended and arouse widespread opposition and uncertainty in the business community.
(b) Response. We are prepared to provide certain special facilities for China but cannot do this on a widescale basis
because of the effect on the economy and therefore confidence. Thereafter as in 2(b) above.
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/contd....