TNAG-0962-FCO40-1181-Possible-new-airport-for-Hong-Kong-1980 — Page 33

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possibility of Chinese participation in one within Hong Kong. A Chinese financial stake, presumably through subsidiaries, in the airport would in itself help to boost confidence and to encourage other investors. But it is hard to see why the Chinese should be interested in financing an international airport in Hong Kong or in Guangdong when they could better use the money for developing White Cloud airport at Canton. However, I quite agree that we must avoid the airport question overlaying or sidetracking the central issue of the future and of the problem of New Territories Leases. Much will depend on how the Chinese react to any approaches by us. If they seem reasonably receptive to the idea of exchanges on practical ways of solving the leases question and if they seem ready to talk on leases in the New Territories extending by some system beyond 1997, then there might well be an opportunity to play on this by broaching the airport issue as an example of a major long-term project in which both sides had an interest. If, for instance, we were looking for more specific statements of reassurance by the Chinese, it might be possible to get them to say that investors in the airport could operate with confidence over several decades and that leaseholders of associated plots, presumably around but not on the airport isself, could similarly be reassured that their holdings would be secure for a reasonable period.

5. We would, however, have to look at the timing of any approach to the Chinese very carefully. Meanwhile we agree that there would be no objection to contact with CAAC on the purely technical questions at a fairly early stage.

Possible Chinese pressure for an Airport in China

6. We were interested that Peking agreed that the Chinese might find the idea of an airport in China so attractive as to press it on us. We would need to see how keen they really were. Obviously we should not reject out of hand the idea of using it as a card on the question of the future but we do not see the idea of an airport project in itself as helpful simply as a confidence building measure. It would be rather like the Guangdong Nuclear Project without the advantage of the sale of electricty by China for foreign exchange. It would probably only be worth entertaining the idea if we got out of it (and this seems highly unlikely) a new and cast-iron agreement on continuing British administration in Hong Kong for a reasonable period beyond 1997. Even then the practical disadvantages outlined in your paper would still weigh very heavily and the balance of the argument tips clearly in favour of the Lantau solution.

7. I note that the paper suggests that the best site for an airport in China isprobably about 25 miles north of the border. Like you, we have no idea how seriously the Chinese have thought about this but the report by Andrew Jean and Associates in September 1979 suggested an airport at Deep Bay near Shenzhen.

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