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2.
Almost
2.
always a possibility, albeit remote in our judgment, that the Government's authority to issue such a lease would be challenged. In that case, authority to issue the lease would have to be confirmed publicly in the form of either legislation or an instruction from the Secretary of State.
The PA said that he not only wished to explain this background to Mr Li. He also wished to make it quite clear that we would not consider proceeding with any of these forms of lease unless we had explicit confirmation from Peking that this accorded with their wishes.
confounly their is the case.
le
3.
Mr Li said he was glad to have the situation explained so clearly. China Resources was indeed a major investor in the Tin Shui Wai project. They held 51% of the shares. They had invested there because the land was cheaper than either Junk Bay or Lantau if the civil engineering work to develop the two latter places was taken into account. He wished to explain that China Resources had a dual nature. From the Chinese point of view it was a State organisation. However, in Hong Kong it operated entirely as a private trading company in accordance with local regulations. He went on to say that all the places where China Resources had thought of investing were of course in the New Territories. Although China did not recognise the so-called "unequal treaties", their terms did impose certain restrictions which were the present reality. This was the framework within which developers, including China Resources, had to operate for the present. The "large questions" would have to be discussed at some time and certainly would be discussed. But the time was too early for this. He hoped the Hong Kong Government would not try to use this "small question" as a way of dealing with the large question.
4.
The PA said he noted what Mr Li said about not solving
It was large questions by means of this smaller question. sometimes possible to avoid major issues temporarily and deal with lesser ones. But, if this was to be done, both sides had to have a clear understanding of what they were doing. This was why, as a first step, SNT had spoken directly to China Resources to clarify what their intentions were. The PA said he remained unclear about whether the messages we had received through the third party were actually passed, as claimed, on the authority of China Resources. Could Mr Li clarify this point.
5.
Mr Li replied that China Resources had no authority to ask for the type of leases mentioned. Nor had they done so. When the matter had been mentioned by SNT it had come as a surprise to China Resources. In answer to a further question, Mr Li said he believed the third party must have misrepresented the position.
/contd..
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