CONFIDENTIAL
MDHZ
125600 6033
VISITS TO CHINA. HE ALLUDED TO CITIC'S ACQUISITION OF 20 PER CENT OF THE STOCK OF HONG KONG TELECOMS. AFTER THE SHARES HAD BEEN BOUGHT, HE HAD SEEN COMMENTS CRITICAL OF BOTH THE UK AND CHINA. THE LINE HOSTILE TO CHINA HAD BEEN THAT CHINA WAS TRYING TO TAKE CONTROL OF HONG KONG'S PUBLIC UTILITIES. THIS HAD BEEN BALANCED
BY THE CRITICISM THAT THE UK WAS TRYING TO WITHDRAW ITS FUNDS FROM
HONG KONG. LORD YOUNG SAID THAT HE PREFERRED TO SEE THIS IN A POSITIVE LIGHT AS A VOTE OF CONFIDENCE IN HONG KONG. HE WAS GLAD
TO HAVE THE OPPORTUNITY TO MEET THE PREMIER. WHEN HE HAD LAST VISITED CHINA IN APRIL 1988, RELATIONS BETWEEN CHINA AND BRITAIN HAD BEEN GOOD AND CONFIDENCE IN HONG KONG HAD BEEN HIGH. SINCE THEN, WE HAD BEEN THROUGH DIFFICULT DAYS BUT IT WAS IMPORTANT TO LOOK AHEAD AND SEE WHAT WE COULD JOINTLY DO TO HELP HONG KONG'S FUTURE. THE BRITISH GOVERNMENT WAS CONCERNED TO SEE PEOPLE LEAVING
TO SETTLE IN OTHER COUNTRIES. TOO MANY RESIDENTS IN HONG KONG WERE LEAVING FOR CANADA, AUSTRALIA AND THE UNITED STATES. PART OF THE REASON WAS LACK OF CONFIDENCE AMONG HONG KONG'S PEOPLE IN
THE FUTURE OF HONG KONG. HE KNEW THERE WERE SOME THINGS WHICH THE BRITISH SIDE HAD DONE WHICH THE CHINESE SIDE DID NOT LIKE. THERE
WERE ALSO SOME THINGS WHICH CHINESE SPOKESMEN SAID WHICH WE DID NOT LIKE. HOWEVER, OLD FRIENDS SHOULD TALK FRANKLY TO EACH OTHER. A SMALL STATEMENT IN LONDON OR IN PEKING BECAME MAGNIFIED IN HONG
KONG. HE THOUGHT IT WOULD BE WISER TO SPEAK FRANKLY IN PRIVATE WHEN WE WERE EXPLAINING EACH OTHER'S POINT OF VIEW, BUT WE SHOULD
CONFINE PUBLIC STATEMENTS TO THOSE POINTS ABOUT WHICH WE AGREED.
HE WAS AWARE THAT THE CHINESE SIDE DID NOT LIKE THE NATIONALITY PACKAGE, BUT THE REASON BEHIND IT WAS GENUINELY TO BOLSTER CONFIDENCE IN HONG KONG. WHEN OTHER COUNTRIES GAVE OUT PASSPORTS TO FOREIGNERS THEY INSISTED THAT THE RECIPIENTS HAD TO GO AND SPEND A TIME IN THEIR COUNTRIES TO ACQUIRE THE RESIDENCE QUALIFICATION. THE BRITISH GOVERNMENT WAS PROPOSING THAT PEOPLE IN HONG KONG WHO WOULD GET BRITISH PASSPORTS SHOULD MEET THIS
RESIDENCE QUALIFICATION BY STAYING IN HONG KONG FOR AT LEAST FOUR YEARS. DURING THIS TIME, IT WAS HOPED THAT CONFIDENCE COULD BE RESTORED. THE BRITISH SIDE WOULD LIKE TO DO THIS IN CONCERT WITH THE CHINESE SIDE. IN THE ENSUING YEARS, HE HOPED THAT WE COULD GO ON BUILDING CONFIDENCE ON THIS JOINT BASIS.
LORD YOUNG THEN RAISED THE QUESTION OF THE NEW AIRPORT AND CONTAINER TERMINAL. HONG KONG WAS THE 11TH LARGEST TRADING AREA AND A SUCCESSFUL FUTURE FOR THE TERRITORY WOULD CONSOLIDATE THE WHOLE PEARL RIVER DELTA. BY 1994/95, KAI TAK AIRPORT WOULD BE TOO SMALL. THE CONTAINER TERMINAL WHICH WAS ALREADY BIGGER THAN ROTTERDAM COULD NOT EXPAND. GIVEN THE
PAGE
2
CONFIDENTIAL