HKB026/21 2/21
RECEIV
26 NOV 1990
SK C
CONFIDENTIAL
(SM Sainty
* Ra
fa Hal China rels.
PM
CONFIDENTIAL
FM HONG KONG
TO TELELETTER FCO
TELELETTER FILE REF PA CR 1/2241/81
OF 21105OZ NOVEMBER 90
INFO TELELETTER UKREP JLG HONG KONG, PEKING
CS/MR1
54
115535
MDTTAN 2881
MCLAREN
MR BURK
MR DAVIES FED
:
FROM WILLIAM EHRMAN, POLITICAL ADVISER, HONG KONG FOLLOWING FOR: ALAN PAUL ESQ, HKD, FCO COPIED TO
:
: DOUG MARTIN ESQ, UKREP JLG HONG KONG
DAVID COATES, ESQ., PEKING
Miss Marsden
Ms major
22/11
CALL ON THE GOVERNOR BY RONG YIREN
1. RONG YIREN, CHAIRMAN OF CITIC CAND A VICE-CHAIRMAN OF THE NPC), CALLED ON THE GOVERNOR ON 21 NOVEMBER. HE HAS BEEN IN HONG KONG FOR A FEW DAYS ON CITIC BUSINESS.
2. THE GOVERNOR REFERRED TO CITIC'S INVESTMENT IN HONG KONG (12.5 PER CENT IN CATHAY PACIFIC, 38 PER CENT IN DRAGON AIRLINES, 24 PER CENT IN THE EASTERN HARBOUR TUNNEL, 20 PER CENT IN HONG KONG TELECOM) AND ASKED HOW RONG SAW THE FUTURE.
3. RONG SAID THAT CITIC'S POLICY WAS TO BE ACTIVE BUT PRUDENTIAL.
CHINA WOULD LIKE TO SEE THE CONTINUED PROSPERITY AND DEVELOPMENT
OF HONG KONG. THE MOST IMPORTANT FACTOR FOR THAT WAS STABILITY. CITIC WISHED TO WORK WITH THE HONG KONG BUSINESS COMMUNITY, BUT FOR CITIC WORK TO BE PRODUCTIVE THE SUPPORT AND ASSISTANCE OF THE
HONG KONG GOVERNMENT WAS ALSO NECESSARY. RELATIONS WITH THE GOVERNMENT IN THE PAST HAD BEEN VERY GOOD. AN EXAMPLE WAS THE
HONG KONG GOVERNMENT HELP GIVEN DURING CITIC'S ACQUISITION OF KA
WAH BANK. THE GOVERNOR SAID THE HONG KONG GOVERNMENT PROVIDED THE FRAMEWORK IN WHICH BUSINESSES COULD TAKE DECISIONS: LOW TAX, A SOUND LEGAL SYSTEM, AND NECESSARY PHYSICAL INFRASTRUCTURE. BUT OTHERWISE, AS A GOVERNMENT, WE THOUGHT THAT BUSINESS WAS GENERALLY BEST LEFT TO THE PRIVATE SECTOR AND THE DISCIPLINE OF
MARKET FORCES.
4. THE GOVERNOR AND RONG DISCUSSED THE GROWING ECONOMIC LINKS BETWEEN THE MAINLAND AND HONG KONG. IN THIS CONTEXT, THE GOVERNOR SAID THAT WE HOPED TO SEE TRANSPORT LINKS DEVELOPING MORE RAPIDLY. HE CITED THE DIFFICULTIES WHICH DRAGON AIR IS EXPERIENCING. IN TERMS OF NON-SCHEDULED FLIGHTS CAAC ARE FLYING
1
PAGE
CONFIDENTIAL