TNAG-1054-FCO40-1304-Trade-relations-between-Hong-Kong-and-the-UK-1981 — Page 21

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14 JUL 1981

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Mr Donald

No

क्षेत्र

LUNCH WITH LORD SHEPHERD, CHAIRMAN OF THE NATIONAL BUS COMPANY

1.

You asked for a note on UK/Hong Kong matters for your lunch with Lord Shepherd at 12.30 pm on Friday, 24 July, before his visit to Hong Kong in August.

2.

Apart from being Chairman of the National Bus Company, Lord Shepherd is also a former FCO Minister of State (1967-1970) and an adviser for Sun Hung Kai Securities Limited in Hong Kong.

3.

Hong Kong's Future. Sun Hung Kai Securities is a Hong Kong finance house and property dealer. I met its Chairman, Mr Fung King Hei, in Hong Kong during my visit in May.

Mr Fung raised the question of Hong Kong's future which he had discussed with Chinese leaders. It is likely that Lord Shepherd will also wish to raise the subject, especially with regard to its effect on investment and business confidence.

4.

Hong Kong Bus Companies. In 1980, Sung Hung Kai made an unsuccessful bid for the Kowloon Motor Bus Company (KMB) in an attempt to gain control of the latter's sizeable land holdings. In view of this and Lord Shepherd's own position as Chairman of the National Bus Company, it is possible that he will mention the Hong Kong bus companies. At the moment the Hong Kong Government is examining the two bus companies' operations following a recent public outcry at fare increases and a Government subsidy to help KMB break even this year. In 1980, BL won a £20 million order from KBM for buses as part of the company's modernisations plans. Further orders from both KMB and CMB are likely in 1981 and 1982.

5.

Trade Projects. My submission of 22ly to Mr Ridley provides further background information on major trade projects in the Hong Kong market.

6.

Economic Developments in China. Sun Hung Kai also has an office in Peking and Lord Shepherd has in the passt suggested to UK companies that they might use its facilities and expertise. It is therefore also possible that Lord Shepherd may talk about recent economic developments in China.

13 July 1981

Bolipr

RD Clift

Hong Kong and General Department

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