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MDHIAN 5726

TRADE COOPERATION WOULD NOT BE AFFECTED: VARIOUS ''COOPERATIVE PROJECTS'' CHEZUO XIANGMU) BETWEEN BRITAIN AND CHINA WOULD CONTINUE. SHELL COOPERATION IN HUIZHOU WAS CONTINUING, CHINA HAD WELCOMED THE BRITISH BID FOR THE GUANGZHOU METRO AND GEC WAS INTERESTED IN VARIOUS POWER STATIONS. (COMMENT: THE LAST SENTENCE WAS OMITTED FROM THE PEOPLE'S DAILY REPORT (1 APRIL). OUR INTERPRETATION OF LI'S MENTIONING SPECIFIC COMPANIES WAS THAT IT WAS NOT A THREAT BUT A POSITIVE STATEMENT MEANT TO DEMONSTRATE CHINESE REASONABLENESS). HE WENT ON TO SAY THAT IF SINO-BRITISH RELATIONS CONTINUED TO DEVELOP IN THE WRONG DIRECTION, AND BECAME VERY TENSE, THEN IT WAS PROBABLY NOT POSSIBLE TO SAY THAT THIS WOULD NOT AFFECT ECONOMIC COOPERATION TO VARYING DEGREES.

COMMENT

7. THE ABOVE ACCOUNTS WERE ALL CARRIED IN PEOPLE'S DAILY

(1 APRIL). THE MAIN HONG KONG POINTS OF LI PENG'S PRESS CONFERENCE WERE ALSO GIVEN FRONT PAGE COVERAGE IN CHINA DAILY (1 APRIL). EXTENSIVE DOMESTIC TELEVISION AND RADIO COVERAGE WAS ALSO GIVEN TO THE CLOSING SPEECHES AND THE HONG KONG SECTION OF LI PENG'S PRESS CONFERENCE (HIS REPLY TO ONLY ONE NON-HONG KONG QUESTION WAS GIVEN IN FULL). THE EMPHASIS WAS ON PORTRAYING THE CHINESE GOVERNMENT AS BEING FAIR AND REASONABLE IN ITS RELATIONS WITH BRITAIN OVER HONG KONG, EVEN TO THE EXTENT OF CONTINUING TO WELCOME TRADE COOPERATION WITH BRITISH COMPANIES, AND SUGGESTING THAT IT IS THE BRITISH GOVERNMENT WHICH HAS CAUSED THE DISPUTE. THERE WAS NO MENTION OF MR PATTEN, EITHER BY NAME OR AS THE GOVERNOR. ONE MIGHT ALSO READ IT AS PREPARING DOMESTIC OPINION FOR A RESUMPTION OF SINO-BRITISH TALKS, PROVIDED THE DRAFT LEGISLATION IS NOT INTRODUCED INTO LEGCO.

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79

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