HKK 01012
IN REGISTRY
2 8 OCT 1986
DESK OFFICER INDEX
PA
REGISTRY Action Taken
GRS 300
RESTRICTED
FM PEKING
TO DESKEY 1308007 FCC
TELNO 1969
OF 121245Z OCTOBER 86
RESTRICTED
HKD
48
DISTANBUTIONA SELECTORS FIRE COPY
FOLLOWING FOR PRIVATE OFFICE FROM PRIVATE SECRETARY
Y K PAC
See50
Seef 52
1. THE SECRETARY OF STATE SAW SIR Y K PAO BRIEFLY AT THE AIRPORT THIS MORNING, HE SAID THAT HE WAS DUE TO SEE THE PRIME MINISTER IN LONDON AT 6.30 PM ON MONDAY 13 OCTOBER. HE HAD JUST RETURNED FROM PEKING, WHERE HE HAD SEEN ZHAO ZIYANG.
2. HE SAID THERE HAD BEEN A CONSIDERABLE SHIFT IN THE CHINESE POSITION ON THE NINGBO STEEL WORKS PROJECT. THE CHINESE HAD NOW
AGREED TO RAISE THEIR OWN PROPOSED SHAREHOLDING TO 25% FROM 5%: Y K PAC WOULD HOLD 5%, THUS LEVING 70% FOR THE BRITISH SIDE INSTEAD
OF 90%.
3. THE MAIN OUTSTANDING PROBLEM CONCERNED THE PROVISION OF CONCESSIONARY FINANCE. ZHAO HAD SAID THAT THE CHINEE HAD SET A TARGET FOR AN AVERGE RATE OF 7% OR LESS. IF THIS COULD BE ACHIEVED, THEN THE PROBLEM OF A BANK OF CHINA GUARANTEE WOULD BE SOLVED''.
1
4. SiR Y K INTENDS TO RAISE THIS QUESTION WITH THE PRIME MINISTER TOMORROW. HE WAS A LITTLE VAGUE ABOUT THE DETAILS, EUT DTI WILL PRESUMABLY BE FAMILIAR WITH THEM. HE SAID THAT HE WOULD BE IN TOUCH WITH THE BRITISH SIDE OF THE PROPOSED PROJECT DURING THE COURSE OF
TODAY.
5. SIP Y K PAO ALSO SAID THAT ZHAO WAS PREPARED TO AGREE IN
PRINCIPLE TO THE PRIME MINISTER'S ''PROPOSAL FOR A PRIVATE MEETING
BETWEEN BRITISH AND CHINESE LEADERS ONCE A YEAR''. (COMENT: WE KNOW OF NO SUCH FORMAL PROPOSAL, BUT THE SECRETARY OF STATE BELIEVES THAT THE PRIME MINISTER MAY HAVE SAID ALMOST JOCULARLY TO HU YAOBANG THAT
THE HAS IT SEEMED TO HAVE BEEN ESTABLISHED OF MEETINGS ABOUT ONCE A
YEAP. GRATEFUL FOR URGENT ADVICE IN CASE ZHAO REVERTS TO THIS WITH
THE SECRETARY OF STATE.)
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