SECRET
28A
Present:
Meeting between the Financial Secretary and the Governor of Guangdong at the Provincial Guest House, Guangzhou : 11 May 1980 at 8.45 a.m.
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Mr Xi Zhongxun, Governor
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Sir Philip (Haddon-Cave
Mr Zeng Dingshi, Deputy Governor C Wilson
Mr Feng Xueyen, Director, DESK 05
Foreign Trade
•INDEX
PA
Resfor, 18/61
Mr Yang Kezhong, Deputy Director
Foreign Affairs Office
Following breakfast with the Governor and general courtesies, the meeting started with the FS giving a general account of what he had done in Peking and Shanghai. He had spoken of the way in which Hong Kong could contribute to modernisation as a market for China's trade, as a source of investment and as a provider of commercial, shipping and financial servi ces. The Hong Kong Government was willing to help in any way it could by introducing businessmen to opportunities in Guangdong and by developing communications. For the former, businessmen needed to have a clear idea of the economic and fiscal policies to be pursued in the places where they would be investing. The Hong Kong Government could also help by itself pursuing sound fiscal and economic policies so that Hong Kong's economy' was stable and prosperous. He had stressed to everybody he had seen, including Vice Premier Gu Mu and Minister Li Qiang, that prosperity and stability in Hong Kong were dependent upon confidence. There was a direct corollation between competitiveness, efficiency, investment and confidence. He had said in Peking that the Government would continue with large-scale capital projects which would demonstrate confidence, but that these would also require loans from the international capital markets and these in turn needed confidence. Those in Peking had under- stood these needs. They had also stressed the importance of keeping in touch, particularly with Guangdong which was Hong Kong's natural neighbour.
2.
Mr Xi responded by saying that relations between Hong Kong and China were really a question of relations between Hong Kong and Guangdong. The province's economic zones depended on investment by Hong Kong businessmen while their products would be exported through Hong Kong as well as consumed domestically. Indeed, Hong Kong's market was already extending into Guangdong with the massive traffic in TV sets, radios and calculators as well as the use of Hong Kong dollars on the black market. The FS explained that most of these goods were in fact gifts and therefore not really exports from Hong Kong.
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