A
117
CONFIDENTIAL
-2-
4. A further reason for not reiterating the invitation is that
to do so might lead the Chinese to expect that we could now respond
positively to their request for a soft loan (see below).
ment would be damaging.
Disappoint-
Has now
5. Gu Mu and others have made us various approaches for soft credits
like those offered by Japanese (most recent loan for $1.3bn, half
probably at 3% over 30 years, remainder at 7.5% to 8.5%). After talks
in December with Deng Xiaoping and Gu Mu, Sir Y K mentioned Chinese
request for soft loan to Prime Minister and Sir M MacLehose.
raised again with Sir E Youde specifically suggesting a loan of
$1bn. (See Sir E Youde's minute of 14 March.) He will see the
Chancellor of the Exchequer at breakfast on 16 March. He professes
to see some link between a loan and agreement on the future of Hong
Kong. We doubt whether there is such a link; Gu Mu is probably
just shopping for cheap loans (success might strengthen his own
political position). But he appears not to have mentioned the
question to Mr Bremridge, Hong Kong Financial Secretary, last week.
6. DOT officials are separately pursuing hints by Gu Mu to Mr Rees
during his visit to China last December. And officials are considering
the question of British aid to China. ODA may recommend a modest
technical cooperation (TC) programme and that China should be
eligible for Aid and Trade Provision (ATP) funds to soften project
credit terms. But there seems no prospect in the near future of
funds being found for a project aid programme in China.
7.
Sir Y K has suggested that money for a soft loan might be
found in Hong Kong if the Hong Kong Government would act as
/guarantor
CONFIDENTIAL
Page 60Page 61
No comments yet.
Private notes are available after approval.