TNAG-1034-FCO40-1284-Visits-by-non-officials-from-Hong-Kong-to-the-UK-1981 — Page 50

CONFIDENTIAL

HKK. 026/19.

Cra

INDEX

15 OCT 1981

PA

RO. 51

REGISTRY Action Taken

NOTE OF A MEETING BETWEEN THE LORD PRIVY SEAL AND MR MSANDBERG

ON 8 OCTOBER 1981

Present:

M

LG 30/12

Mr H Atkins

Mr M A Arthur

Mr P J Williamson

Mr M G Sandberg

31

Hongkong and Shanghai Bank bid for the Royal Bank of Scotland

1. In responding to Mr Atkins' welcome, Mr Sandberg mentioned that he hoped to be able to announce next week his Bank's approval of a £60 million contract with British Steel for the steel for the Hongkong and Shanghai Bank's new headquarters. He hoped that this and other work given to British companies against strong international competition would kill an suggestion that the Bank was not British. Mr Atkins said he assumed there would be no question of the Bank's bid for the Royal Bank of Scotland being rejected because the former was not British.

The Future of Hong Kong

2. Mr Sandberg said people in Hong Kong were going through a rather gloomy phase and were worried about the future. Next year it would be only 15 years to 1997 and there were 15 year mortgages in Hong Kong. Lawyers and accountants might be difficult over investments in the New Territories. It would be particularly damaging if overseas invest- ment dried up because of this uncertainty. He added that the delay in announcing the name of the next Governor was adding to the worry; people could not understand why it had not been made public. Mr Atkins said that he fully understood the point but the decision had not yet been made. On the future, the Chinese would no doubt like an informal arrangement with HMG over Hong Kong but this would not satisfy the lawyers, who would need the security of written argument. Mr Sandberg said that while there was as yet no sign of investors going elsewhere because of doubts about the future, he would expect to see them do so in 24 months time if nothing had been agreed with the Chinese.

Mr Atkins' visit to Hong Kong

3.

Mr Atkins said that he hoped to visit Hong Kong towards the end of November/beginning of December. However he might have to postpone the visit to early in the New Year because of parliamentary business.

Popular Asperations

4. Mr Sandberg agreed that growing prosperity in Hong Kong had increased the expectations of the younger generation. Leisure was no longer a luxury and they expected a better standard of living. They were also reluctant to work in factories. All this was good for Hong Kong although it was more difficult to govern.

Distribution:

HKGD (to enter) PS/LPS

Mr Donald

Governor, Hong Kong (Personal)

Ho

CONFIDENTIAL