TNAG-1038-FCO40-1288-Future-of-Hong-Kong-1981 — Page 78

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kats

the limbich Mr Flav

1.6

2

Y.E.

SECRET

Page.

HKK-040/1-

Future of Hong Kong: Views of Mr Fung King Hei

When I saw Mr Fung of Sun Hung Kai Properties today, he raised the question of the future.

J.b.

He was worried about the likelihood of a drop in confidence. Indeed in April there had already been

signs that this might be starting. His information

showed that already many investors (though not, I understood, large ones) were removing funds from Hong

Kong.

3.

Mr Fung said he had raised the question twice

with the Chinese Government :

4.

a)

b)

early in 1980 with Gu Mu and Ulanfu. He had

given them a written assessment that the Chinese should take positive steps to restore confidence. They appeared sympathetic and

undertook to discuss the matter with other Chinese leaders; 98.

in April 1980 (just after Lord Carrington's visit) with Bo Yibo and Liao Chengzhi.

made two points:

Mr Fung

i) the general importance of maintaining

confidence, illustrating this by his assessment of the partial pull out by

investors;

ii) the need for a statement in some form

that British administration would continue.

The reaction on the second occasion had been

much more unfavourable. The standard assurances were

repeated but he was told that the Chinese were not worried by a modest outflow of money from Hong Kong. Mr Fung was spoken to pretty sharply and interpreted the Chinese line as a clear warning that they had no

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