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CONFIDENTIAL
BUSINESS MOOD
GENERAL
1. The temperature seems to have fallen somewhat over the past fortnight, perhaps because the Governor's absence in the UK has resulted in reduced press coverage. The subject no longer arises at every discussion.
On the other hand, certain underlying trends seem to have emerged
2.
Those opposed to the Governor's proposals seem more strongly entrenched than hitherto;
a.
b. the assumption that it will somehow all be worked out by politicians and diplomats over the course of the next year is no longer widely held; but
the range of opinion across the spectrum has become more marked: there is no consensus one way or another and no such thing as the businessman's view.
c.
The following is not an attempt at a comprehensive analysis we have neither the resources nor the experience for that simply a list of arguments made in conversation.
3.
DETAIL
4. Perhaps sparked by Vincent LO's early (and controversial) intention to stake out a position on behalf of business leaders, there has been an attempt in various business organisations to agree a common view. The General Chamber failed to agree anything in its initial discussion. The British Chamber (to my regret and in my absence) decided to discuss the Chamber's attitude towards the proposals and agreed nothing but the issuing of a questionnaire. The Chairman (James Chiu of GEC) gave it as his opinion that the majority of members would either wish the Chamber to be silent or to express any views in private. There were similarly inconclusive discussions in the Retailers'
Federation.
5. Until yesterday I had come across no example of retaliation against a British Company. There had seemed to be a consistent line from Peking, as expressed to Lords Prior and Young, for example, and articulated by Zhou Rongji in London that business and Hong Kong should be treated separately. On 26 November, however, a Balfour Beatty delegation alleged that British Construction companies faced exclusion from consortia bids for work in China if the dispute was not settled soon. It seemed, however, that this opinion did not come direct from China's
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CONFIDENTIAL
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