CONFIDENTIAL

171411

MDHOAN 2509 >

Economic relations are mutually beneficial.

We note that China at present enjoys an annual trading surplus of pounds 500 million with the UK.

Discrimination against British firms would not be consistent with the EC/China Cooperation Agreement, or the spirit of China's GATT application.

- A mistake to think that discrimination against UK commercial and economic interests would bring about change of policy on Hong Kong.

(if raised)

Aware of report concerning Shandong power project being cancelled. Seeking confirmation.

(Canton Metro: if raised)

Disappointed that British companies did not secure the

rolling-stock contract. Still large number of contracts to be awarded in the project for which British companies are continuing to compete.

HURD

YYYY

MAIN

71

.HK COMMERCIAL GENERAL

DISTRIBUTION

84

HKD

PUSD

ECONOMIC ADVISERS

ERD

FED

JOINT DIRECTORATE

LEGAL ADVISERS//MS BROOKS

.AND MS BARRETT

NEWS D

PLANNERS

RAD

PS

PS/MR GOODLAD

PS/PUS

MR CROWE

SIR J COLES

MR HUM

MR BONE

MR MINGAY

ADDITIONAL 13

PAGE

2

CONFIDENTIAL

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