TNAG-1171-FCO40-1452-Future-of-Hong-Kong-1982 — Page 107

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Invitation to Gu Mu

4.

Gu Mu was formerly a Vice Premier with important economic

responsibilities. During his visit to China last December the

Minister for Trade, Mr Rees, invited him to come to Britain.

The invitation was renewed by Mr Atkins in January. But Sir YK

Pao was anxious that we should press the invitation harder,

partly so that Madame Gu Mu could launch one of his ships in

Britain. Our disinclination to do this was strengthened by

doubts about Gu's political standing and by the difficulty of

having nothing to say to him about a soft loan (see below). In

the recent Chinese reshuffle Gu Mu has lost all his previous

responsibilities and become one of a number of 'State Councillors'

said to be of equal status to Vice Premiers but unlikely to have

as much influence as before.

Soft Loan to China

5.

The Chinese have been fishing for soft loans from western

countries interested in commercial projects in China. Japan,

Belgium, Denmark, Canada, Sweden and other countries have been

willing to help, but (as the Chancellor has already told Pao)

we cannot afford to get involved in an aid race. Normal ECGD

support is, of course, available. This reduces the cost of loans

for British goods and services to 10%. Pao believes that a soft

loan must help towards a deal on the Future of Hong Kong. We

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/doubt

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