CONFIDENTIAL

IMMEDIATE

broadcasting in Cantonese and, less importantly, the restriction

on levying subscription fees. Miss Spencer confirmed that there was virtually no likelihood of the British Government agreeing

to subsidise any element of World Service TV's costs.

4.

Your tur confirms the restriction on Hutchison broadcasting in Cantonese. But it would be helpful, before we revert to the

BBC, which we need to do soon, to know the reasons for this

restriction and whether there is any chance of it being lifted

in the foreseeable future.

5. From our perspective here this proposed news channel has a

number of advantages. It would clearly be good for the BBC, as

spelt out in our tur. But, taking a broader, more political,

view, we see some force in the argument that there would be

advantage in encouraging continuing access in Hong Kong and China to responsible, objective news coverage and comment, such as that produced by the BBC World Service, up to and beyond

1997. One of the points made by Mr Li, when emphasising the freedom from interference which satellite broadcasting permits,

was that if the uplift arrangements in Hong Kong were to be

interrupted for any reason there is a back-up system based in

Thailand, which would automatically come into operation.

6.

Obviously this argument will not have been used with the

Chinese. However, since the Chinese Government owns one third of Asiasat and Hutchison's links with China are good, they are presumably confident that their proposed use of the satellite will not provoke Chinese hostility.

HURD

YYYY

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