As

Classification

CONFIDENTIAL

OUT TELEGRAM (CONT)

Caveat

=

ecedence

IMMEDIATE

the administration of Hong Kong until 30 June 1997.

These considerations have been reflected in our discussions with

the Chinese over the airport. It is important that the Hong

Kong Government has the ability to manage the project

efficiently. The Chinese Government have concerns about the

effect of the project on the financial position of Hong Kong

after 1997: we have made proposals which should meet these

concerns. Our negotiators are currently in Peking for talks on

these matters.

I hope that in private contacts with the Chinese authorities

your Government will take the opportunity to emphasise to them

that the international community attach great importance to the

success of the Joint Declaration and to the maintenance of Hong

Kong's long-term prosperity and stability: and that investor

confidence in Hong Kong will be enhanced if Britain and China

can cooperate effectively to manage the transition to Chinese

sovereignty.

Hong Kong will be seriously affected if the United States does

not renew China's Most Favoured Nation Status. We have

therefore lobbied extensively in the United States in support of

renewal of that status because of Hong Kong.

I hope that the Singapore Government will lend its support to

these efforts, in the interests of Hong Kong's continuing

prosperity.

301

MESSAGE ENDS

2.

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ented a UK HMSO: 1 De POCSETS M100 CON 55294

Catchword:

STOCK No. C037C

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