UKP697 VBX773
1436 LETTER 2 HONG KONG
A 99-YEAR LEASE ON WONG KONG'S RURAL NEW TERRITORIES ABUTTING CHINA, RUNS OUT IN 1997 AND MR DAVIES SAID
UNCERTAINTY ABOUT THE COLONY'S FUTURE WAS AFFECTING ITS ECONOMY AND FOREIGN INVESTMENT IN IT.
SEVERAL PROJECTS COULD NOT GO AHEAD WITHOUT BETTER ASSURANCES FOR THE FUTURE, HE SAID
MR DAVIES STATED THAT A CLEAR UNDERSTANDING MUST BE REACHER WITH CHINA WITHIN THE NEXT COUPLE OF YEARS. IN RECENT. MONTHS CHINESE LEADERS HAD ISSUED A SERIES OF SIGNALS DESTONED TO REASSURE INVESTORS WHILE CHAIRMAN HWA HAD SAID THE COLONY'S FUTURE SHOULD BE SETTLED THROUGH CONSULTATIONS.
LONDON, AS A SUTTORE TO CHINA MUST NOW RAISE THE MATTER. A POLICY OF WAITING FOR PEKING TO INTRODUCE THE ISSUE SHOWED A RUDIMENTARY LACK OF KNOWLEDGE OF CHINESE PSYCHOLOGY. HE SATP
HE, PODEN HIT IS SURELY YOUR DUTY AS THE PRIME MINISTER-
OF PRITATH TO TGNORE THE QUER-CAUTIOUS POUISE OF THE
BUPEACRATS WHO SURROUND YOU AND POINT OUT TO CHAIRMAN HUA HOW MUCH MORE HELPFUL HONG KONG COULD BE TO CHIUR'S MODERNISATION. IF ITS FUTURE WERE SECURED. + REUTER BOM