CONFIDENTIAL

On the airport, the Prime Minister could say that some progress Wag been made during the Governor's talks with

and

weekL

will

Lu Ping last week that discussions would be continuing, and that we believed that through discussion we should be able to clear up Chinese doubts about the financial aspects.

As those attending the lunch are members of the

Anglo-Hong Kong Trust, which was established in 1988 with

the aim of promoting trade, investment and other links

between Hong Kong and the UK, the Prime Minister might also

wish to stress what British companies have done for

Hong Kong and to voice the expectation that those trading

links, of great value to us both, should be further

strengthened and expanded. Given the enormous wealth and

large industrial holdings of most of the guests, the Prime

Minister might also refer to the UK's attractiveness as a home for inward investment should any of those present be thinking of setting up in Europe prior to 1992 or later.

Finally, two points on the guest list enclosed with

your letter:

(i) Dr Pauline Chan, who is described as having given scholarships to Oxford University, has in fact financed two fellowships, one for physics and one for economics, (both believed to be at St Hilda's); and

(ii) Mr T T Tsui might require a little extra attention. He is less polished than many of the other guests and has poor English, But he has been exceptionally generous to the UK with/large donations to the Victoria and Albert Museum and the South Bank Centre, and has recently invested in the UK by buying a South London bus operating company. He is thought to be a little upset that he has not so far

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CONFIDENTIAL

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