RESTRICTED
4. Chinese officials have said publicly that they wish to see a revised financing proposal, but their comments about what they
expect it to contain suggest that our new proposal may not
secure agreement. In practice their attitude is likely to depend on developments on the constitutional front.
5.
The Hong Kong Government plan to make the financing plan
public on 21 May, and to consult the Airport Consultative
Committee and the LegCo Ad Hoc Group on 24 May. In early June,
the Hong Kong Government will have to seek funds from the
Finance Committee for the continued operation of the Provisional
Airport Authority.
TALKS ON ELECTORAL ARRANGEMENTS
6.
The first two rounds of talks were held in Peking 22-24
and 28-29 April. The third round is due on 21-23 May. We were
unable to get down to discussion of practical arrangements in
the first two rounds of talks, although the atmosphere was
positive and workmanlike. But the Chinese strategy was clearly
to tick-off agreement to as many as possible of their original eight prejudicial points of principle, and to concentrate on wearing us down on the remainder.
7. Judging from Foreign Minister, Qian Qichen's reply to the
Secretary of State's message of 7 May, the Chinese are not yet ready to move away from this position and are waiting for us to "take a new step". The prospect for the third round is therefore of three days of trench warfare, with neither side
having anything new to say.
NATIONALITY ISSUES
8. Mr Fung is not a member of the LegCo Nationality
sub-committee, but he has endorsed (and may raise with
sos.call.PR
SLM
RESTRICTED