CONFIDENTIAL

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17.

The visit from 14 to 19 October therefore provided an opportunity for the Department to appreciate the state of economic developments in the more traditional industrial areas of China and to assess their openness vis-a-vis South China which Hong Kong industrialists are familiar with.

Visit Activities on 14 October (Monday)

18.

The delegation arrived at Qingdao in the afternoon of 14 October. However, the visit did not began smoothly. Although the Qingdao authorities intended to receive us with due courtesy, an incident occurred when the customs officials at the airport made a fuss

about our taking in souvenirs intended for the municipal authorities of both cities. Despite

the presence of the Deputy Secretary-General of the Qingdao municipal government, the

souvenirs, which were just 'silver' plates engraved with the names of the Qingdao and Dalian

municipal offices to be visited, were impounded and we were only able to get them back

the following day with the help of the local municipal officials. As a result the Mayor of

Qingdao, Mr. Yu Zhengsheng (E), who hosted a dinner reception for the delegation

that evening was duly embarrassed - and visibly irritated on our behalf - when we explained

why we had nothing to offer in return to his souvenir.

Visit Activities on 15 October (Tuesday)

Meeting with the Qingdao Municipal Officials

19.

In the morning of 15 October, the delegation first called at the Municipal Government Office of Qingdao, a magnificent 19th century European-style building formerly the seat of the German colonial governor. We were received by Mr. Bi Yuyan (†),

the Deputy Secretary-General of the Municipal Government and his colleagues. Mr. Bi told

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