Background

1. There has been no delay to the airport plans since they

were announced by the Governor of Hong Kong in October 1989:

the Hong Kong Government have been pressing on with the

project as quicly as possible. However, there are

undoubtedly concerns about the absence so far of Chinese

support, shared by parts of the international financial community and by some people in Hong Kong.

2.

The Chinese have asked the Hong Kong Goverment to delay issuing tenders until their experts have had time to study the proposals. The Hong Kong Government have made no commitment to do so, but have agreed to continue to brief

them fully.

3. Key decisions need to be made in early 1991, and if

Chinese support is not forthcoming by then, the question of delay or reappraisal could arise.

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