TNAG-0743-FCO40-947-Relations-between-China-and-Hong-Kong-1978 — Page 112

(E)

SECRET

2

institutional buildings, e.g. trade

exhibition centres;

(g)

additional ship-repairing facilities.

+3..

The framework within which Government intends

to approach these Chinese applications is as follows :

(a) It is in our interests that Hong Kong should be

maintained as, essentially, a free economy.

Hong Kong benefits from this competitive

environment.

Other organisations would

Any special

legitimately complain if we gave special

facilities to China and not to them.

treatment will therefore be exceptional and the

result of a carefully considered policy decision.

(b)

(c)

SECRET

We must plan ahead to have adequate facilities

for all (e.g. wharfage capacity) including

sufficient for China's present and likely future

expansion of economic activity here, from which

Hong Kong benefits both economically and

politically. With China's policy of making

greater use of Hong Kong, this may require revision

of existing plans.

There are occasions when we need something from

China which we cannot get elsewhere (e.g. oil

and kerosene during the oil crisis). We should

be prepared to give the Chinese special facilities

to get it. Such occasions should be few, other-

wise we destroy the competitive environment.

((a)