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(C) AT THE SAME EVENT, DAVID LI (RESPECTED AND MEASURED CEO OF THE BANK OF SOUTH-EAST ASIA) TOOK ME ASIDE TO SAY THE ROLLS-ROYCE AERO-ENGINE ADVISORY BOARD, OF WHICH HE WAS A MEMBER, WERE WORRIED THAT THEIR PRODUCTS WOULD BE BLACK-LISTED IN CHINA IF THE SITUATION WERE NOT CONTAINED. HE WISHED HMG TO BE AWARE OF THEIR FEARS. HE IS ON A NUMBER OF OTHER BOARDS AND HE CARRIES WEIGHT.

(D) ON 15/3 SIR WILLIAM STONES, NORMALLY THE LEAST POLITICAL OF MEN, SAID HIS CHINESE COLLEAGUE, CHAIRMAN OF THE DAYA BAY NUCLEAR PLANT, HAD GRILLED HIM AT THEIR LAST MEETING ABOUT HIS CONTACTS WITH THE GOVERNOR AND THE HONG KONG GOVERNMENT AND ADVISED HIM TO BE CAREFUL. THIS WAS THE FIRST TIME, HE OBSERVED, THAT POLITICS HAD BEEN RAISED WITH HIM BY THE CHAIRMAN.

(E) AT A MEETING LATER IN THE DAY WITH SENIOR MEMBERS OF THE BUSINESS AND PROFESSIONALS ASSOCIATION I CAME UNDER PRESSURE TO REPORT THE FEARS OF BOTH CHINESE AND BRITISH MEMBERS. THOUGH WE WERE DISCUSSING TRADE, THE TOPIC KEPT RE-SURFACING AND THE APPREHENSIONS OF THE MEMBERS WERE GENUINE.

(F) SIR W PURVES, THOUGH BOUND BY HIS EXCO RESPONSIBILITIES NOT TO TALK IN ANY DETAIL, MADE KNOWN HIS DISCOMFORT IN A PRIVATE EXCHANGE.

4. WE ARE IN NO POSITION TO EVALUATE THESE COMMENTS WHICH COINCIDE WITH A RESUMPTION OF INTENSE MEDIA SPECULATION. WE ARE NOT A CHANCERY AND GENERALISATIONS ABOUT BUSINESSMEN'S ATTITUDES TOWARDS POLITICS ARE RISKY, BUT SINCE THE INITIATIVE IN EACH OF THE ABOVE CASES WAS TAKEN BY THE INTERLOCUTORS I THOUGHT THE COMMENTS DESERVED REPORTING.

5.

DAY

THE GENERAL BUSINESS MOOD REMAINS AS BUOYANT AS EVER.

YYYY

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