CONFIDENTIAL

CONFIDENTIAL

FM HONG KONG

TO PRIORITY FCO

TELNO 1675

OF 19124OZ JUNE 92

INFO PRIORITY PEKING

HKC 026/5

см

la

132503

MDLIAN 3740

CALL BY GOVERNOR OF SHAAXI: 19 JUNE.

1.

THE GOVERNOR OF SHAANXI, BAI QINGCAI, CALLED ON ME ON 19 JUNE. HE WAS IN HONG KONG TO PUBLICISE A TRADE FORUM TO BE HELD IN THE PROVINCE IN SEPTEMBER, AND HAD HELD TALKS WITH THE TRADE DEVELOPMENT COUNCIL ON THIS. WE HAD AN ANIMATED DISCUSSION ON ECONOMIC DEVELOPMENTS IN SHAANXI, THE FINER POINTS OF WHICH WERE OCCASIONALLY RENDERED INCOMPREHENSIBLE BY BAI'S STRONG ACCENT.

2. BAI TOLD ME THAT LIKE EVERYWHERE ELSE IN CHINA, SHAANXI WAS KEEN TO RESPOND TO DENG XIAOPING'S CALL FOR ECONOMIC REFORM. THE PROVINCE HAD, HOWEVER, HAD ITS DIFFICULTIES IN OPENING UP TO THE OUTSIDE WORLD DUE TO ITS POOR INFRASTRUCTURE. BUT THINGS WERE NOW PICKING UP. A NEW INTERNATIONAL AIRPORT HAD BEEN BUILT AT XIANYANG. DAILY DIRECT FLIGHTS BETWEEN HONG KONG AND XIANYANG WOULD BE INTRODUCED IN SEPTEMBER. THERE WOULD ALSO BE FLIGHTS TO TOKYO AND SINGAPORE. A NEW RAILWAY WAS BEING BUILT FROM THE SOUTH OF THE PROVINCE TO THE NORTH ONLY THE LAST SECTION OF WHICH, FROM YENAN (370 KILOMETERS) REMAINED TO BE COMPLETED.

3.

-

THESE INFRASTRUCTURAL IMPROVEMENTS, BAI SAID, WOULD HELP BOTH TRADE AND TOURISM. SHAANXI'S TOTAL EXPORTS NOW STOOD AT US DOLLARS 600 MILLION PER YEAR, WITH US DOLLARS 150 MILLION OF THESE BEING TO HONG KONG. HONG KONG BUSINESSMEN HAD INVESTED IN TEXTILES, ELECTRONICS AND FOODSTUFFS INDUSTRIES AS WELL AS IN HOTELS. (THE NEW WORLD GROUP HAD TWO IN XIAN). ALL ECONOMIC POLICIES APPLICABLE TO INTERNAL REGIONS IN CHINA HAD NOW BEEN

ADOPTED IN SHAANXI.

BAI SAID THAT TOURISM HAD NOW RECOVERED FROM ITS SETBACK IN 1989. AS THE CRADLE OF CHINESE CIVILISATION, SHAANXI'S POTENTIAL FOR GROWTH IN TOURISM WAS ENORMOUS. XIAN WAS FAMOUS FOR ITS TERRA-COTTA ARMY. BUT THIS ONLY REPRESENTED PART OF EMPEROR QIN'S

TOMB. THE REST OF HIS TOMB AND 72 OTHERS REMAINED TO BE EXCAVATED. FIVE DYNASTIC REIGNS HAD TAKEN THEIR CAPITALS IN SHAANXI. AND A NEW MUSEUM IN XIAN, THE BRAINCHILD OF THE LATE

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CONFIDENTIAL

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