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FM WELLINGTON

TO PRIORITY FCO

TELNO 264

OF 05040OZ JULY 91

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HKB 182 16

RECEIVER

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08 JUL 1991

041370 MDLIAN 4091

TOP COPY Q DIST?

A

INFO PRIORITY HONG KONG, PEKING

INFO ROUTINE CANBERRA, WASHINGTON, BTC HONG KONG INFO ROUTINE UKREP JLG HONG KONG

MIPT: CHINA/HONG KONG: THE AIRPORT PROJECT:

PRIME MINISTER TO CHINA

VISIT OF

1. TEXT OF MCKINNON'S STATEMENT IS AS FOLLOWS.

BEGINS

OUR TRADING FUTURE IS INEXTRICABLY LINKED WITH THE DYNAMIC ECONOMIES OF ASIA. HONG KONG HAS AN IMPORTANT PLACE IN THIS REGION, AND FOR THAT REASON WE HAVE BEEN FOLLOWING THE NEGOTIATIONS ON HONG KONG'S FUTURE CLOSELY I AM DELIGHTED TO HEAR THAT AGREEMENT HAS NOW BEEN REACHED BETWEEN THE BRITISH AND CHINESE GOVERNMENTS ON THE AIRPORT DEVELOPMENT

PROJECT AND ITS FINANCING.

UNCERTAINTY ABOUT WHETHER OR NOT THE AIRPORT PROJECT WOULD GO AHEAD SERVED NO-ONE'S INTERESTS. NEITHER DID UNCERTAINTY ABOUT HONG KONG'S FINANCIAL RESERVES IN 1997. FOREIGN AND

LOCAL BUSINESS CONFIDENCE WILL NOW TAKE HEART FROM THE AGREEMENTS WHICH HAVE BEEN REACHED. I AM SURE HONG KONG

CITIZENS WILL ALSO FEEL MORE REASSURED ABOUT THE FUTURE OF

HONG KONG IN 1997 AND BEYOND.

THIS IS A POSITIVE OUTCOME TO WHAT MUST HAVE BEEN DIFFICULT NEGOTIATIONS. THE SIGNIFICANCE OF THE AGREEMENTS REACHED IS OBVIOUS FROM THE BRITISH PRIME MINISTER'S INTENTION TO TRAVEL TO BEIJING TO SIGN THEM.

FROM NEW ZEALAND'S POINT OF VIEW, CONFIDENCE IN HONG KONG AND ITS FUTURE WITH CHINA WILL BE BENEFICIAL FOR OUR TRADE AND ECONOMIC LINKS WITH BOTH. A SUCCESSFUL AND SMOOTH TRANSITION IN 1997 WILL BE A POSITIVE FACTOR IN THE ASIA-PACIFIC REGION GENERALLY.

THE NEW ZEALAND GOVERNMENT HAS EXTENDED AN INVITATION TO

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