临
SCR 18/5701/47 III
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CONFIDENTIAL
2
outlined in some detail.
No mention was made of the
more ambitious projects mentioned last year: in particular the plans for a deep water port and international airport. These ideas are still supposed to be under study but it is difficult to see them being pursued in present circum-
stances.
4.
Before the visit took place we had received an indication, through a UMELCO Member who was in Macau shortly beforehand, that the Governor of Macau would be giving us details of the "secret agreement" between Portugal and China relating to Macau, whose existence has been the subject of frequent rumours and reports. In the event the subject was raised only during a private talk which the Governor had with Rear Admiral Almeida e Costa over tea. I enclose a copy of the Governor's record of this conversation. It confirms our view that the status of Macau is the subject of a clear understanding between the Chinese and the Portuguese but that there is almost certainly no agreement in written form.
5.
Over lunch Sir S Y Chung had some conversation with HO Yin (who clearly still regards himself as a channel of communication with the Chinese though he is no longer the unofficial representative - see para 3 of the Governor's record). HO Yin, too, denied that there was any secret agreement between Portugal and China in written form. In answer to Sir S Y's question he said that to his knowledge, the NPC had never discussed the Hong Kong issue, even in committee or at the Provincial level, and he did not expect the subject to come up in June. Sir S Y pointed out to him that Hong Kong's prosperity was dependent on a relatively small group of people who were mobile and could and would leave if they lacked confidence in future arrange- ments. HO did not deny this assertion. He commented that while China could do without Macau the contribution made by Hong Kong was very important and China would wish to preserve it.
6.
The visit was a pleasant and relaxing occasion, with no contentious issues raised, or needing to be raised by either side. It was clear from the figures quoted that Macau has so far weathered the recession reasonably well, particularly as regards its export industries. But there are problems. The new hotels planned when the property boom was at its height in Hong Kong and now completed or nearing completion are not so far attracting many guests, and work has not yet started on the vast private housing
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