TNAG-1034-FCO40-1284-Visits-by-non-officials-from-Hong-Kong-to-the-UK-1981 — Page 4

(54

50

SECRET

FM PEKING 180829Z DEC 81

TO IMMEDIATE FCO

SECRET

TELEGRAM NUMBER 750 OF 18 DECEMBER

INFO IMMEDIATE HONG KONG

Mick 026119

--

RECEIVED I KIQITET NO. ST

2 1 DEC1981

DESK N

INOSY

FOR DONALD AUS. HONG KONG TELEGRAMS 1130 AND 11411

Y K PAO'S VISIT.

पर्व

52

за

PER 31/12

ник

See HRR 040/1

1. | SHARE THE GOVERNOR'S RESERVATIONS ABOUT SIR Y K PAO'S RELIABILITY AS A REPORTER AND, ON PRESENT EVIDENCE DOUBT WHETHER THERE CAN BE MUCH WORTHWHILE LINKAGE BETWEEN A SINO-UK TRADE DEAL AND HONG KONG'S FUTURE.

2. BUT DENG'S WORRIES ABOUT ARMS FOR TAÏWAN ARE OF COURSE GENUINE. THE SINO-US RELATIONSHIP COULD WELL GO WRONG, WITH SERIOUS WIDER IMPLICATIONS,

NR

3. THERE HAVE ALSO BEEN OTHER INDICATIONS OF CHINESE INTEREST IN LOANS ON FAVOURABLE TERMS FROM THE UK. GU MU DID SOME FISHING ON THIS SUBJECT DURING HIS TALK WITH MR REES AND, AS REPORTED IN ATKINSON'S LETTER OF 9 NÓVEMBER TO ELLIOTT, TANG KE, MINĪSTER OF METALLURGY HAS MORE THAN ONCE SUGGESTED THAT WE WOULD DO MUCH BETTER IN THE WAY OF ORDERS IF OUR OFFERS CONTAINED AN AID ELEMENT. 4. AS YOU KNOW? WE HAVE ARGUED FROM HERE (ATKINSON'S LETTER UNDER REFERENCE) THAT SOME MONEY ON SOFT TERMS WOULD PRODUCE DIS- PROPORTIONATELY GOOD TRADE EFFECTS HERE. OUR FRIENDS AND

COMPETITORS HAVE ALREADY TAKEN THIS POINT. IN ADDITION TO THE JAPANESE, THE BELGIANS AND DANES HAVE DONE BUSINESS IN THIS WAY AND ACCORDING TO GU MU, THE ITALIANS ARE READY TO OBLIGE. THE WEST GERMANS GIVE CONSIDERABLE AID UNDER THE TECHNICAL ASSISTANCE HEAD

5. I WENT OVER THIS GROUND WITH MR REES DURING HIS VISIT, STRESSING THE DESIRABILITY OF A DECISION WELL IN ADVANCE OF THE PRIME MINISTER'S VISIT.

6. HONG KONG TELEGRAM NO 1141, ZHOU JI ANNAN SERVES ON THE FOREIGN INVESTMENT CONTROL COMMISSION AND THE IMPORT/EXPORT COMMISSION., JIA SHI IS VICE MINISTER OF FOREIGN TRADE, AND ALSO SERVES ON THE ABOVE TWO COMMISSIONS.

NR

CCN PARA 3 LINE 4 ATKINSON'S LETTER OF 9 NOVEMBER...

CRADOCK

LIMITED

HK&GD

THIS TELEGRAM

WAS NOT ADVANCED

FED

SIR E YOUDE MR DONALD

SECRET

(14