TNAG-0034-FCO40-70-Relations-with-China-1968 — Page 41

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Jay then said that there was one matter on which the Chinese would like the assistance of the Hong Kong Government. The Bank of China has some land at Tsuen Wan which they would like the Hong Kong Government to resume. I asked why they wanted to work in this way and not put the land on the open market or sell directly. Jay explained that the land in question is owned by the South China Iron Works, a company in which the Chinese Government has holdings. (Comment: Presumably this could be checked with the Registrar of Companies, although I am aware that the CPG usually has such holdings in the names of individual local employees.) The old Managing Director, SO, died some while ago and the firm had then been run by a "young rascal" who had got into debt and had gone off to Taiwan, leaving the firm heavily

The Chinese were not mortgaged to the Bank of China. prepared to take legal action against somebody living in Taiwan, but on the other hand were concerned about the probable embarrassment if the land were sold by them and were eventually to be taken over by an American firm or an American-backed firm. Jay promised to get me details of the land in question, DD sheet number, and so on. (Comment: In his recent discussion with Douglas Spankie, Jay indicated that agreement to the proposed land deal might be used as exchange for Grey - Jay made no mention of this possibility to me, but suggested that it would be an indication of our willingness to be friendly and helpful if we were to agree to it.)

23rd September, 1968.

J. Catar

(J. Cater)

c.c.

D.S.B.

H./A.R.G.

Mr. W.S. Carter (C.0.)

Mr. J. Murray (F.0.)

Mr. P. Cradock (Peking)

Mr. D.R.A. Spankie, (E.S.S.)