CONFIDENTIAL
70
A
Background
3.
The Chinese proposals are summarised and analysed in Hong Kong telno 580. Perhaps the most striking of all is
the proposal that Hong Kong should set aside HK$ 50 billion
for the future use of the Hong Kong SAR. This would be in
addition to the Land Fund, agreed under the Joint
Declaration, which the Hong Kong Government estimate is
likely to contain up to HK$ 88 billion by 1997 (at 1997
prices).
4. As the Governor points out, the other Chinese proposals
would serve to slow down planning and work on the new
airport. It is therefore difficult to reconcile these
proposals with the demand that the airport should be
"basically" completed by 1997.
5. The Governor concludes, with justification, that if the
Chinese stick rigidly to these ideas, we face the prospect
of having to abandon the airport project. That would be bad
for Hong Kong. But it would also be, I believe, a setback
for China. Most of the evidence suggests that the Chinese want the airport to be built and that their present stance
is not simply a wrecking tactic.
B 6. In Hong Kong telno 581, the Governor sketches out
alternative ideas which could form the basis of an
agreement. These counter proposals would still constitute a
fundamental departure from present practice and could be
presented to the Chinese as significant concessions. I
believe that they constitute a reasonable and realistic
negotiating position.
с
1.
The Governor has suggested that a message from him (text
in Hong Kong telno 582) be sent to Lu Ping, with Ministers'
approval, making it clear that the Chinese proposals are
unacceptable.
VIMACT/2
CONFIDENTIAL