SECRE!
2.
had told HE in 1979 that the time was opportune for talking about leases etc, I had thought he was ahead of the game. His later view that it would be about 3-4 years before the Chinese would focus on such issues had seemed to me more plausible. In addition, I thought there were two types of explanation for the marked change of atmosphere which he had felt. One was that Chinese policy towards Hong Kong had actually changed. The other was that political uncertainty in Peking, and the ideological tightening up now going on, meant that all those dealing with difficult issues and connections with the outside world were becoming more
I thought the second explanation the more likely
cautious.
and hoped it would be a temporary phenomenon.
8.
I added that I hoped the leadership in Peking got a true picture of the Hong Kong economy and potential future problems from its own representatives such as the Bank of China. It was also useful if they were well informed through influential businessmen. Mr Fung said he thought neither the Bank of China nor China Resources dared to send accurate reports to Peking. He thought there might be a time when he, Sir Y K Pao and Mr Li Ka Shing should go together privately to Peking to talk to Deng and others. I commented that I thought the time was not yet right for such a move.
9.
Comment. Mr Fung expressed himself as very worried by what had been said to him. This seemed to be on account of the atmosphere more than the precise words since there is nothing that remarkable in the latter. Although he denied it, a conversation of this sort can only have started with him talking about the future and the need for further / assurances. In part it must have been a reaction against what
the Chinese would have seen as his importunity.
10.
It could be that this conversation was intended to get back to us as a warning that the Secretary of State should not talk about the future when in Peking. If so, we will get the message from other sources as well. But I am inclined V to doubt that this is the case. Even if it were, I do not think
we should change the line already recommended.
с
(D C Wilson)
PA
19.2.81
i
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