CONFIDENTIAL
$24
Reference..
Mr. Hum
من
(1430/4 (Son).
Mr. Rowell 11344
FROM: K C Walker
Asian Region
Research Department
OAB 2/125
DATE: 11 April 1984 KK040
273 3502
HK
Mr. Right
CC:
Лиз
Kowals
12/2
Dr Wilson Mr Orr, FED
- 3 MAY 1984
ура
JAK 2/5.
VERY
Action Takum
*
罪
W
188415
Mr. Clift
TALK BY DEREK DAVIES, EDITOR OF THE FAR EASTERN ECONOMI REVIEW, ON THE FUTURE OF HONG KONG
With Mr Ashton of FED I attended the talk given by Mr Davies at Chatham House on 5 April.
1.
2.
Mr Davies began by saying that apart from any personal observations he had no objection to his talk being regarded as on the record. He was critical of the handling of the question of the future by the British and Hong Kong Governments. He claimed that the Prime Minister in 1982 had disregarded good advice given her by the Japanese not to adopt a legalistic approach. While acknowledging that doubts based on earlier Chinese behaviour in Shanghai were Junderstandable, he said that the Hong Kong government was
unduly influenced by the Chinese members of EXCO who gravely misunderstood China's present attitudes. He was also critical of the present directors of Jardines, who he said had reversed the clearsighted policies put in hand by Jardine's former chairman, Mr Newbigging.
3. Mr Davies drew a distinction between the attitude of EXCO and that of the business community in Hong Kong as illustrated by the behaviour of the stock market, which had risen in response to reports in 1983 that the British government had agreed, albeit conditionally, to relinquish sovereignty. As factors which augured well for the future he adduced the opening to the West and more liberal economic policies launched by Deng; also China's strong need for Hong Kong as a source not only of foreign exchange earned from trade but of large investment funds (eg for the Guangdong nuclear project and future offshore oil development). Mr Davies said that he had indications that even such a novel idea as a joint venture between Cathay Pacific and the Chinese airline, whereby Cathay would reorganise its Chinese counterpart on efficient lines, was not totally out of the question. He said that if China's present pragmatic policies continued, Hong Kong would have a tremendous future.
On the other hand, Mr Davies also pointed to "dark forces" in China which continued to threaten her stability. He was particularly concerned about the tendency for
4.
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