GRS 700
SECRET
Hren 026/19
SECRET
17 DEC 1961
*
FM HONG KONG 151125Z DEC 81
TO IMMEDIATE FCC
TELEGRAM NUMBER 1130 OF 15 DECEMBER
INFO IMMEDIATE PEKING (FOR AMBASSADOR ONLY) No i cał
FOR DONALD FROM GOVERNOR.
30/12 pax 31/12
1. SIR Y K PAO HAS BEEN IN CHINA ON SHIPPING BUSINESS IN SHANGHAI,
BUT WAS INVITED TO PEKING WHERE HE SAW GU MU, CHANG WENJIN (MFA VICE MINISTER) AND DENG.
2. HE HAS AN IN THROUGH A RELATIVE LIU SHI CHANG (VICE MINISTER OF FOREIGN TRADE AND VICE-DIRECTOR OF THE FOREIGN EXCHANGE COMMISSION) WHO ARRANGED THE VISIT TO PEKING.
3. BEFORE HE WENT IT WAS NOT CLEAR WHO HE WOULD SEE EXCEPT GU MỤ AND I SUGGESTED THAT, AS A HONG KONG PROPERTY OWNER, HE PUT IT TO
GU THAT SOME FIRM ARRANGEMENTS ABOUT HONG KONG WOULD HAVE TO BE MADE
SOON.
4. HE HAD A LONG TALK WITH GU AND SUBSEQUENTLY DINED WITH HIM AND
YANG (SECRETARY GENERAL OF THE MILITARY AFFAIRS COMMISSION AND FORMERLY VICE-GOVERNOR OF GUANGDONG AND MAYOR OF CANTON). GU ASKED
PAO TO ACT AS UNOFFICIAL SPECIAL ADVISER TO HIM ON MATTERS OF EXTERNAL FINANCE.
5. GU EXPLAINED PROBLEMS OVER JAPANESE CONTRACTS AND A FURTHER LOAN AND ASKED FOR ADVICE WHICH PAO GAVE. GU THEN MENTIONED THE KWEICHOW COAL DEPOSITS AND REFERRED TO RATHER UNSUCCESSFUL ATTEMPTS TO RAISE CAPITAL IN HONG KONG FOR MINES, A RAILWAY AND A
PORT TO EXPLOIT THEM, AND ALSO TO MR REES'S VISIT. PAO EXPLAINED THAT SUCH A PROJECT COULD NOT BE VIABLE AT INTEREST RATES PREVAILING IN THE MARKET, MOREOVER IT WAS TOO BIG AND CONTAINED TOO MANY UNCERTAINTIES TO ATTRACT PRIVATE CAPITAL. HE ADVISED GU TO GO TO THE WORLD BANK PROVIDED HE WAS PREPARED TO ACCEPT THEIR MANY DISCIPLINES.
6. PAO THEN SPOKE OF HONG KONG WHICH GU DESCRIBED AS ''VERY COMPLICATED''. AFTER PAO HAD DISPOSED OF THE SHUM SHUN AIRPORT AS A
RELEVANT ISSUE, AND EXPLAINED THE PROBLEMS IMPOSED BY BRITISH LEGAL REQUIREMENTS AND THE EFFECT ON INVESTORS LIKE HIMSELF AND OF
THE NEED TO DO SOMETHING TO MAINTAIN THE PRESENT POSITION, GU SAID POSITIVELY SOMETHING MUST BE DONE IN THE NEXT 2 OR 3 YEARS. 7. PAO SPOKE SIMILARLY TO CHANG WENJIN (ON WHOM HE SAID LIU HAD ARRANGED FOR HIM TO CALL) WHO COMMENTED NON-COMMITTALLY THAT THE BRITISH WERE VERY CLEVER AT FINDING WORDS TO SOLVE PROBLEMS. 8. THE NEXT DAY HE SAW DENG WITH LIU AND JIA SHI (OF THE FOREIGN EXCHANGE COMMISSION) ALSO PRESENT, BUT NOONE FROM MFA, FOR 1 AND A HALF HOURS. DENG SPOKE AT SOME LENGTH OF HIS DIFFICULTIES WITH THE US OVER ARMS FOR TAIWAN, AND ASKED PAO TO TELL THE WHITE HOUSE
SECRET
/тинт
49
See (52
ник оч
see
(10
#14
1982
Page 15Page 16