MELABV(5)

CONFIDENTIAL

Background

1.

Dr Helmut Sohmen, an Austrian national, is the son in law of Sir

Y K Pao and a prominent businessman in his own right. He is

Managing Director of Dragon Airlines and Chairman of the World-Wide

Shipping Agency. He is also the Chairman of the Hong Kong General Chamber of Commerce, a highly prestigious and influential body which

represents all the leading commercial interests in Hong Kong. Dr

Sohmen was a member of the Legislative Council from 1985 to 1988 and

has remained a prominent political figure. He and his wife

entertained the Prime Minister whilst she was on holiday in Austria

this summer.

A

New Lease

2.

Dr Sohmen is, in general, a sensible and moderate voice, but he

has one or two odd ideas. One which he has been promoting recently

is the notion that the Chinese might, post 3-4 June, be amenable to

an arrangement whereby the UK continued to administer Hong Kong post

1997 under a kind of management contract: the Chinese would receive

in return some billions of dollars as annual rent. Dr Sohmen

floated this idea in an article published in the South China Morning

Post on 7 July and has been encouraging prominent businessmen to

take it up privately in Peking. It would be interesting to know

whether he still holds out any hope for this proposal.

B

Democracy

3. Dr Sohmen has long advocated a gradual approach to

democratisation. In the LegCo debate on the 1988 White Paper, he

was scathing in his criticism of those who advocated the immediate

introduction of direct elections. It would be interesting to hear

Dr Sohmen's current views on democratisation.

Nationality

Dr Sohmen accepts that it would be unrealistic to expect HMG to

grant right of abode for all Hong Kong people or to legislate on the assumption that not everyone would come here. He is also sceptical

4.

CONFIDENTIAL

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