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5.
Saying it was true that there were not yet many
big projects, Mr Liao added that both Governor Xi and the Mayor of Guangzhou, Yang Shangkun, would like to develop some big projects. They were still considering what should come first. After twelve years of confusion people wanted to do everything at once. However, the important thing was that the Government of Guangdong paid great attention to the development of relations with Hong Kong. He hoped that before long the two sides would be able to sit down together again to talk about concrete questions.
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6. The Governor remarked that there were already some big projects such as hotels and housing developments. Sir Y K Kan had been given a list of things in which Guangdong was interested. We were now considering this and whether small groups of businessmen dealing with the fields concerned should follow up on the suggestions. One project which had been mentioned was a railway from Guizhou Province to the port of Zhanjiang to transport coal which would later be shipped to Hong Kong.
In six years' time or so, Hong Kong's power stations would certainly need a large amount of coal 4/5 million tons per year. This was a very large project which would need extremely careful study. In addition, Hong Kong was carrying out a serious study of the building of a nuclear power station in Guangdong to supply Hong Kong. This project had the very strong support of the Government. Careful investigation was needed to deal with questions of siting, safety, the equipment used and the financing of such a plant. These studies would take one or two years (Mr
Liao interjected that they would take longer). Meanwhile the value of small projects should not be underrated.
7.
The Governor continued by saying that Hong Kong's Financial Secretary, Sir Philip Haddon-Cave, had recently been to China. He was pleased that this opportunity had arisen for someone to explain in detail what the Hong Kong economy could do for China's modernisation programme. We would encourage investment in Guangdong. But the greatest help we could give was in China's foreign exchange earnings in Hong Kong. These amounted to some US$4 billion per year. This earning capacity depended to some extent on factors outside our control, such as market conditions in Europe and North America. Hong Kong's ability to export to these markets was what gave it the purchasing power to buy Chinese goods. This was a good example of inter-dependence. In this connection Hong Kong's prosperity looked like continuing this year, but there might well be a downturn next year. A second
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