TNAG-0358-FCO40-394-Registration-of-merchant-shipping-in-Hong-Kong-1972 — Page 123

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7. It is, however, true that Mr. Y. K. Pao and other

Hong Kong businessmen are given to asking for concessions

which can also be turned to their commercial advantage.

Knowing this, there is certainly some danger that shipping

interests in this country, including the unions, might

interpret the transfer of the register as the forerunner of

a wider transfer of powers and decline of standards. Ship-

owners in Hong Kong might make the same deduction, and the

Hong Kong Government might come under new pressure to allow

things to slide.

3. I therefore agree that there is some need for caution,

and that we might examine with the Hong Kong Government

whether the concessions outlined by Michael Heseltine would

be sufficient for their purpose, and whether the transfer of

the register might give rise to expectations and pressures

which could more easily be absorbed in London. If the Hong

Kong Government hold to their preliminary conclusion that the

transfer of the register, while not absolving them from the

requirement to maintain standards, would permit a closer

relationship with local shipowners, then I believe we would

be wise to agree to their request.

There is also the subsidiary point that Mr. Y. K. Pao

is considering purchasing new ships from British yards among

9.

/others.

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P