CONFIDENTIAL
From The Minister of State
Foreign and Commonwealth Office
London SW1A 2AH
119
21 December 1982
(1/3
see HART 026/2 1983
HKIZ O
076/3
jear Patuck
HONG KONG
7
р кун Рыгора
1. I have just returned from a 4-day visit to Hong Kong (6-10 December). This is a fascinating time there. Opinion at all levels there is focussed almost exclusively on the question of the Future of the Territory after 1997. There is an acute awareness of the problems, and confidence in the economy is very sensitive to any news about our talks with the Peking leadership, or indeed about our relations with China generally. The Chinese for their part have been conducting an elaborate propaganda campaign in Hong Kong.
2. For your forthcoming visit you will of course have full briefing. I myself was impressed by the case made there for British exporters to do more not just in capital goods but also in consumer goods (paradoxically).
3. I was intrigued by one ingenious three-legged proposal for coal supply to the Castle Peak Power Station. I understand there is ample supply of coal in China, but to extract and clean it adequately fairly sophisticated equipment (i.e. British) would be needed. A deal might be possible whereby Hong Kong undertook to buy exclusively Chinese coal for a given period while the Chinese guaranteed to buy British equip- ment for it. I do not know whether a deal will prove possible to arrange. You are no doubt aware of all this, but I wondered if there is anything HMG can do as a catalyst. From an FCO point of view of course, the spin-off from such an arrangement would be immensely help- ful for confidence in Hong Kong at this particular time.
4. I have written in similar terms to Peter Rees, who is also about to visit Hong Kong.
Yours sincerely,
(BELSTEAD)
The Rt Hon Patrick Jenkin MP
Secretary of State
Department of Industry 123 Victoria Street
London SWIE 6RB
CONFIDENTIAL
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