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try to agree with the Chinese on the identity of the Chief Executive. The Secretary of State agreed with you that the question which the Chinese had raised of a pool of civil servants from which the Chief Executive would select the SARG's senior civil servants, was one to be discussed between the Hong Kong Government and the Chinese: it was not for the British Government. This issue should not be played too long given the signs that the Chinese were developing their own thinking about the transition. He agreed to raise the issue of Transitional Affairs Advisers with Qian.
Economy
The Secretary of State was alarmed by the situation we appeared to have got into over the airport railway. He thought that the problems of contingent liabilities and cost increases were more likely to be understood by those on the Chinese side with experience of business (and for that matter Li Peng) than officials such as Lu Ping, who would make out that this was another British plot. We needed to get businessmen to make the case to Peking. A message from the Prime Minister to Li Peng might well also be needed depending on the reactions we got from the Chinese in the Airport Committee and during the Chinese Foreign Minister's visit here.
The Secretary of State agreed strongly with
Mr Broadbent's assertion that it was essential in the light of previuse experiences over the airport discussions, to avoid surprises for the Chinese. We must give the Chinese greater notice when a problem was coming over the horizon. The Secretary of State would like to be able to take the Chinese Foreign Minister through the forthcoming decision points on the airport project and the Hong Kong economy so as to put the Chinese on notice of forthcoming difficulties. He asked for a "political critical path" of Airport-related decisions to enable him to do so.
Chinese Foreign Minister's Visit
The Secretary of State agreed with the proposals in your submission of 6 February, ie that the Hong Kong priorities for the visit should be the Air Service Agreements and Chinese commitment to continued cooperation over forthcoming airport questions, as well as defence lands. The Secretary of State did not comment on the line which it is proposed Sir J Coles should take with Ambassador Ma, although I believe that he would be content with it. The Secretary of State did underline the importance he placed on Lord Caithness, who will visit Hong Kong in the week before Qian comes to Britain,
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