1.5. Mr Baul
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Mr Show 13/5 Mr Fumers 1/14/3 fgv
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SEE PARA. 5.
FROM:
PS/Lord Caithness
HKB 300/2.
DATE:
12 March 1991
RECEIVED IN
STAY
CC:
Mr Burns
25 MAR 1991
DESK OFFICES
Mr Davies, FED
Mr Colvin, SEAD
INDEX
14 in
Ms Marsden, HKD
LORD CAITHNESS' LUNCH WITH CAZENOVE & CO
&co,
12 MARCH
1. Thank you for your minute of 11 March. Lord Caithness had lunch today with The Hon Victor Lampson of Cazenove.
Mr Lampson was accompanied by Mr Edward Whitley (who together with Mr Lampson is responsible for Cazenove's South East Asia operations; both have served in Hong Kong) and Mr Stephen Carden (described somewhat tongue in cheek as "World President" and responsible for coordination and some domestic operations). The Minister was accompanied by Mr Burns.
2. The Cazenove Partners were very bullish about the Hong Kong economy. They believed it was "growing up" as a major financial and, by financing plants in Guandong, manufacturing centre. It was a "real" economy. The growth
now.
prospects for Guandong and hence Hong Kong were considerable and for that reason Cazenove restricted their activity to that part of China for the present. In answer to a question from Lord Caithness Mr Lampson thought that Shanghai was too far away and too "different" from Canton to be worth developing
He preferred to let the banks take the first steps (and risks). Cazenove might be ready to follow in 20 years. In short, there was little support for the analysis Mr Hay Davison had put to the Minister a few months ago. Mr Lampson argued that as Hong Kong matured as an international market it required more regulation than hitherto (an explicit swipe at Mr Henry Keswick here) but less than Singapore which was excessively bureaucratic. It had recently taken Cazenove over a year to open an office there. He agreed that nothing could be guaranteed in Hong Kong post-1997. The best we could do was to put the right structures in place, and this was happening. He did not believe that Hong Kong was corrupt in the sense of company strategies and contracts being determined by bribes, though there was a strong urge there to self-enrichment. While the economy was growing some cream could be skimmed off. But the situation was quite different from elsewhere in South East Asia.
/3. Cazenove thought