Mr Galsworthy
CONFIDENTIAL
HKB 01/13
RECEIVED IN DESISTRY
20 MAY 1993
12.9.
4ADR 19
DESK OFFICER INDEX
REGISTRY
FROM:
A R Paul
PA
Action Taken
DATE:
11 May 1993
CC:
Mr Llewellyn, GH Mr Ricketts, HKD
FREDERICK FUNG KIM-KEE
1. I had lunch with Frederick Fung on 11 May at his initiative. He wanted to tell me about his recent visit to China (where he saw Lu Ping, Chen Zuo'er and others in the HKMAO) and to preview his forthcoming visit to London.
Airport
2.
Interestingly, this (rather than constitutional development) was on the top of his mind. He said that the chinese had told him that they wanted the Airport Committee to meet soon to resolve outstanding problems; that the problems should be soluble, provided the UK stuck to the MOU; and that the Chinese side were prepared to be flexible over financing. Specifically, Chen Zuo'er had said that
(a) they were prepared to be flexible over the $5 billion borrowing ceiling, provided the British side could give good reasons for the need to exceed it. (Fung did not think, however, that the Chinese would accept the distinction between government borrowing and borrowing by the PAA/MTRC).
(b) the HKG's share of the Land Fund could be used, together with other HKG reserves, subject to the $25 billion limit.
Fung said he had tried to draw out Chen on specifics, but without success. Chen maintained that it was for the British side to come up with specific proposals.
3.
Fung had floated his pet idea of meeting the shortfall by borrowing from the SAR Land Fund at the prevailing interest rate. Chen had said that "in principle we wouldn't reject that idea". Fung took this to be a positive sign.
CONFIDENTIAL