From The Minister of State
Gear Peter
HONG KONG
CONFIDENTIAL
Foreign and Commonwealth Office
London SW1A 2AH
21 December 1982
See HKRO26/3
HKR 026/3
y iGM Paulin у ідм
1983
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 Patrick Jenkin who is also about to visit Hong Kong.
Yours sincerely,
H
(BELSTEAD)
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Peter Rees Esq QC MP Minister of State Department of Trade 1 Victoria Street London SW1H OET
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