RESTRICTED
-2-
40% of China's export trade went out through Hong Kong and 80% of investment in the Delta came in through Hong Kong. There was plenty of competition in the region for such investment - notably for Taiwanese capital in S.E. Asia. He thought it possible that Peking was prepared to allow the Canton area to develop on a looser rein than the rest of China: the Delta only represented some 6-7% of the population of China so that failure of a comparatively liberal strategy there would not be of major significance, as seen from Peking, whilst success might provide useful lessons. He therefore thought that the recent reaction in Peking against anything resembling "perestroika" would be unlikely
affect economic developments in the Delta - though he personally thought that it would be difficult to maintain current levels of expansion in the Delta (he gave as an example recent growth in electricity consumption which was running at 35% per annum).
4.
to
Speaking of Macao's own strategy for the coming years, the Governor said that it was Portugal's intention to try to decouple the territory as much as possible from the metropolitan apron strings. He thought that Macao was already further down the road to democratisation than Hong Kong: two thirds of the Legislative Council was elected, either directly or indirectly, and it was intended to establish elected municipalities in the near future in order to strengthen grass roots democracy.
The projected
university would be established independently of local authority in the hope that this would make it more difficult for Peking to interfere in its direction when it assumed control. Macao would try to obtain a similar status in Gatt to that enjoyed by Hong Kong. As for the question of
of the stationinhg of Chinese armed forces in Macao after 1999, the Portuguese took the view that since that he had seen no Portuguese armed forces in Macao since 1975 (ie before the signature of the Portuguese/Chinese agreement) the Chinese would be altering the status quo which was the basis of the agreement should they bring armed forces other than police into the territory.
5.
On the question of Tienanmen and all that, the Governor emphasised that his visit to Peking should not be seen as condoning what had happened. Indeed, the Portuguese authorities had condemned the massacre and there had been demonstrations in Macao. But it was necessary to carry forward the discussions on "the Macao Strategy" and to begin a normalisation process. He had found the Chinese officials whom he met anxious to make a good impression. He had been received in much the same manner and at much the same level as his previous visit in 1988. He had found the Chinese authorities unashamed of what had happened in Tienanmen: they believed that the students had been taken over by subversive elements supported by Western interests anxious to overthrow the existing regime. When I asked him whether this was more than a propaganda position and if so, whom in the West they suspected, he
RESTRICTED