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THURSDAY, JULY 4, 1991

WE

GOVERNOR : WHEN WE FIRST ANNOUNCED THIS IN OCTOBER OF 1989, HAD BRIEFED THE CHINESE BEFORE THAT. AT THAT PARTICULAR TIME WE HAD NO REASON TO BELIEVE THAT IT WAS GOING TO CREATE ANY PROBLEMS. IT HAS SINCE BECOME CLEAR I SAID THIS IN ANSWER TO AN EARLIER QUESTION THAT CHINESE CRITICISM OF THE PROJECT WAS GOING TO AFFECT THE WAY IN WHICH THE PRIVATE SECTOR WOULD OR WOULD NOT INVEST IN THE PROJECT OR THE SORT OF PREMIUM, IF YOU CAN PUT IT LIKE THAT, THE PREMIUM THAT THEY MIGHT PUT ON THEIR INVESTMENT IF THERE WAS UNCERTAINTY, AND THAT IS WHY IT HAS BEEN SO NECESSARY TO GET A POSITIVE ATTITUDE FROM CHINA.

STEVE GLAIN: SO THEY WERE BRIEFED ON THE MAGNITUDE AND THE PROXIMITY OF THE PROJECT BEFORE YOU MADE YOUR ANNOUNCEMENT?

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GOVERNOR: THEY WERE BRIEFED ON WHAT WE WERE DOING IN DEVELOPING THE PROJECT. IT'S NOT JUST A QUESTION OF BRIEFING CHINA I DON'T KNOW IF YOU WERE HERE AT THAT PARTICULAR TIME BUT IT WAS MASSIVELY COVERED IN THE PRESS HERE FROM 1988 ONWARDS, WHAT WE WERE DOING, AND AS I SAY, WE HAD NO REASON TO BELIEVE THAT THIS WAS GOING TO CAUSE ANY PARTICULAR PROBLEMS.

LOUISA TAM (COMMERCIAL RADIO): SIR DAVID, WE ALL KNOW THE MAIN STUMBLING BLOCK HAS ALWAYS BEEN THAT CHINA WANTS TO HAVE A SAY ON ALL MATTERS THAT GO BEYOND 1997, BUT IF WE READ PAGE 4, PARAGRAPH (G), IT LOOKS LIKE THAT THERE HAS ALREADY BEEN A COMPROMISE BY THE UK GOVERNMENT TO GO AND INFORM THE CHINESE GOVERNMENT TWICE A YEAR ON MATTERS OF MUTUAL CONCERN. DOES THAT MEAN DURING THOSE MEETINGS THE UK GOVERNMENT WILL HAVE TO GET APPROVAL ON ALL THOSE MATTERS THAT GO BEYOND 19977 HAS THERE BEEN A COMPROMISE ON THAT, THAT CHINA WILL HAVE A SAY ON ALL MATTERS THAT GO BEYOND 19977

GOVERNOR : NO. I MEAN ALL THAT HAS BEEN AGREED IS HERE ON THAT PIECE OF PAPER IN FRONT OF YOU, NOTHING IN ADDITION TO THAT AT ALL. THE IDEA OF MEETING TWICE A YEAR WAS IN FACT PUT FORWARD BY THE BRITISH FOREIGN SECRETARY, MR DOUGLAS HURD, WHEN HE VISITED CHINA EARLIER THIS YEAR, AS A WAY OF TRYING TO MAKE SURE THAT CO-OPERATION WAS INTENSIFIED DURING THIS PERIOD AS WE GO UP TO 1997, AND THAT THERE WAS A WAY OF DEALING WITH ISSUES AT A HIGH LEVEL IF THAT SEEMED TO BE NECESSARY. AND IN A SIMILAR SORT OF WAY, THE PROVISION THAT I SHOULD MEET REGULARLY WITH MR LU PING, IS SO THAT WE CAN TRY TO TRON-OUT ANY DIFFICULTIES, NOT JUST ON THE AIRPORT, AND ALSO HAVE A MEANS OF DISCUSSING THINGS ON A MORE REGULAR BASIS THAN PERHAPS WE HAVE HAD UP TO NOW.

LOUISA TAM: SO YOU CAN PROMISE AT THIS POINT THAT DURING THOSE MEETINGS TWICE A YEAR, THERE WON'T BE ANY SECRET DEALS OR ANYTHING THAT WILL GIVE CHINA A SAY IN ALL MATTERS THAT GO BEYOND 1997?

GOVERNOR : WHAT I CAN TELL YOU ABSOLUTELY IS THAT ALL THAT HAS BEEN AGREED IS HERE IN THIS MEMORANDUM OF UNDERSTANDING WHICH YOU HAVE GOT IN FRONT OF YOU, NOTHING ELSE HAS BEEN AGREED TO THAT. I CAN'T TELL YOU, OBVIOUSLY, WHAT IS GOING TO HAPPEN IN EVERY MEETING BETWEEN HERE AND 1997.

/CHRISTINA CHOW (RTHK):

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