TNAG-1036-FCO40-1286-Future-of-Hong-Kong-1981 — Page 30

SECRET

5.

I think what we are now hearing is no more than some new ideas being sparked off by Mr Wu who has an over-optimistic interpretation of Chinese reaction or lack of it. My impression is that he is a brilliant entrepreneur who quickly erases from his mind anything which fails to fit in with his own schemes. His visit to Peking must have coincided very closely with that of Edmund Lau who reported Liao's displeasure with the lease scheme. That report was subsequently validated by the discussions here with NCNA and China Resources. It is hard to believe that Wu was simultaneously getting encouragement for a similar idea.

6.

Finally, I told Michael Banks that, so far as the Government were concerned, we would only consider different forms of lease arrangement if the suggestion for them came from or through an official Chinese organisation. I think that must remain our position.

сс

RJT McLaren Esq Far Eastern Department

M W Atkinson Esq MBE PEKING

<

(D C Wilson)

SECRET

eve

d

2.

Page 30Page 31