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155064 MDLIAN 146

DISCLOSE THE AGENDA. A FEW PAPERS QUOTED FCO SPOKESMAN IN HK CHRIS OSBORNE AS SAYING A MEETING WOULD BE HELD BEFORE THE MINISTERIAL MEETING, BUT THE EXACT DATE HAD YET TO BE FIXED. THE HK ECONOMIC JOURNAL UNDERSTOOD THE NEW MEASURE OF ALLOWING EXPATRIATE CIVIL SERVANTS TO SWITCH TO LOCAL TERMS WOULD BE ON THE AGENDA. CHINESE SOURCES SAID THE CHINESE SIDE WOULD INSIST TO BE CONSULTED ON MAJOR CHANGES TO THE CIVIL SERVICE SYSTEM. THEY WOULD ALSO ASK THE BRITISH SIDE TO MAKE CLEAR ITS STAND

ON AND PLANS FOR LOCALISATION.

13. MING PAO REPORTED (12.8) THE TWO MINISTERS DECIDED TO MEET SOME TIME BETWEEN 27-30 SEPTEMBER IN NEW YORK TO REVIEW THE PROGRESS OF THE TALKS, THE JLG AND THE AIRPORT COMMITTEE. THE TWO SIDES WERE TRYING TO SPEED UP WORK ON THESE THREE AREAS BEFORE THE MINISTERIAL MEETING. FCO SPOKESMAN CHRIS OSBORNE WAS QUOTED AS SAYING A DATE HAD NOT BEEN FIXED FOR THE NEXT JLG MEETING, BUT ARRANGEMENTS WERE BEING MADE FOR THE MEETINGS OF THE VARIOUS EXPERT GROUPS.

AIRPORT

14. A FEW PAPERS QUOTED BRITISH SOURCES AS SAYING AFTER THE BRITISH SIDE HAD EXPLAINED TO THE CHINESE SIDE IN THE AIRPORT COMMITTEE MEETING THAT THE SARG WOULD HAVE SUFFICIENT RESERVES AND FINANCIAL ABILITY TO REPAY LOANS, THE DIFFERENCES BETWEEN CHINA AND BRITAIN OVER FINANCIAL ARRANGEMENTS HAD NARROWED. CHINESE SOURCES WERE QUOTED AS SAYING THE CHINESE WERE WILLING TO ACCEPT LOANS EXCEEDING DOLLARS 5 BN. THE BRITISH SIDE DID NOT RULE OUT THE POSSIBILITY OF INJECTING MORE CAPITAL INTO THE PROJECT. THE CHINESE SIDE HAD ALSO COME TO REALISE THAT IN MAJOR PROJECTS LIKE THE AIRPORT IT WOULD BE DIFFICULT TO PUT A CAP ON COST. BUT THE CHINESE SIDE WOULD WANT TO PLACE MORE EMPHASIS ON COST CONTROL.

VISA POLICY OF SCHENGEN CONVENTION COUNTRIES

15. PAPERS REPORTED (12.8) THE ACTING POLITICAL ADVISER JOHN ASHTON MET CONSULAR REPRESENTATIVES OF THE NINE SIGNATORY COUNTRIES OF THE

SCHENGEN CONVENTION TO URGE THEM NOT TO IMPOSE NEW VISA RESTRICTIONS ON VISITORS FROM HK. THE CONSULAR REPRESENTATIVES HAD AGREED TO REFLECT HKG'S VIEWS TO THEIR OWN GOVERNMENTS. IT WAS NOTED A DECISION HAD YET TO BE MADE BY THE NINE COUNTRIES ON HK'S VISA STATUS. SOME PAPERS NOTED THE BRITISH GOVERNMENT WOULD ALSO BE LOBBYING ON HK'S BEHALF.

CNTA SURVEY

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