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the Revolution, and it would have significant implications for UK trade in China and generally in the area. A triangular Sino/British/Hong Kong venture of such proportions would in itself have wide political implications but added significance would be read into it (rightly or wrongly) from the fact that
the repayment of the foreign exchange content by KEC would depend both on sales to Hong Kong and on Hong Kong remaining
outside the Renminbi Area at least until 2005.
8
The
As Ministers will be aware, the Lease on the New Terriroties
is due to expire in 1997. It is too early to expect the PRC to give any indication as to what their attitude would be towards a continued British administration in Hong Kong. However, they have already given oral assurances to investors in Hong Kong that they wish the economic status quo to be maintained.
development of projects which strengthen economic inter- dependence between Guangdong and Hong Kong should tend to contribute to mutual vested interest in Hong Kong's stability
and thus should help to maintain business confidence in the territory. Although it is unlikely that it will in itself provide a solution to the question of the future of Hong Kong, a major project such as a nuclear power station could well play an important role in reassuring investors about China's interests in maintaining Hong Kong's status.
9
Equally consideration of this project has already gone quite far. Sir Lawrence Kadoorie has received encouragement (of which the Chinese will be aware) at a high political level
in the UK, and HMG have provided very strong official support to the CLP team. So to back away now would be interpreted as a
deliberate act of disinterest.
10 Officials therefore consider that this project warrants
support and participation by HMG. If Ministers agree with this general assessment then specific decisions on a number of issues
are needed.
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