7
ROBAUY ( 4 )
13. Dr Sohmen said there was much sympathy in the international community for Hong Kong. The US, Japanese and even Singapore had been helpful. Overall Hong Kong was in not so bad shape but the
shortage of labour was a real problem.
14.
Mr Maude agreed that labour was a problem but noted that it
seemed to have been solved by investing in Southern China. What was
the position post June? Dr Sohmen replied that many companies were
now looking at South East Asia in general. He thought that this was
probably no bad thing diversification. But there was clearly a
A
need to maintain Hong Kong's economy, both the service and
manufacturing sectors.
15. Mr Maude said that he detected a great synergy between Hong
Kong and Southern China. Dr Sohmen said there was but the
succession the leadership problems in China could pose a problem.
In the worst case there might be Civil War and Guangdong province,
would become a battlefield because of its economic importance. it made sense to spread the risk. It was difficult at this stage to
judge who would assert themselves when Deng went.
-
So
16. Mr Maude said that previous experience suggested that it would
take some time for things to settle and for a new leader to appear. It was still necessary to maintain business confidence but perhaps
this was not as difficult as it might seem business seemed to be
fairly confident already. Dr Sohmen agreed and said that if there
had been one positive aspect to the events of early June it had been to make people deal realistically and in a businesslike way with
China, instead of with the previous starry-eyed type of attitude.
Distribution
PS/Mr Maude
Mr McLaren
Miss Marsden
News Dept
Mr Stone
24 October 1989