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for each side to procure 50% of the equity and 50% of the debt. On the UK side, Schroders would be putting together a financial package involving US, British and Japanese banks, British banks had so far been taking a very cautious attitude to the project. On the other hand, a number of major Hong Kong Chinese investors had already indicated that they would be interested in equity participation.
The Chinese Dimension
8.
Mr McLaren explained the reasons for Chinese suspicion of PADS and the various steps we had been taking to overcome this. The Chinese still appeared to be evaluating the information we had given them. There had been some indications that a more positive view was beginning to emerge. We needed to continue to inundate them with information showing that the PADS project was feasible, was good for Hong Kong and would not encumber the future SAR Government with enormous debts. We hoped eventually to be able to overcome Chinese suspicions.
This was one of
the reasons why we wanted to try to get back to a better working relationship with China.
9.
Sir G Manzie asked whether he should visit Peking to seek a meeting with Li Peng. Mr McLaren said that he could see no harm in such a visit as part of our continuing efforts to convince the Chinese of the importance of supporting the project. But it would make sense to wait until the position was clearer regarding Japanese involvement. Sir G Manzie said that the Governor had also suggested delaying his visit until later in the year.
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