TNAG-1434-FCO40-1917-Hong-Kong-leading-personality-Sir-Yue-Kong-Pao--businessman-1986 — Page 330

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Foreign and Commonwealth Office

London SW1A 2AH

J W Dowling Esq

PS/Mr Luce

Office of Arts and Libraries

Great George Street

London SW1P 3AL

Dear John,

Telephone 01-

Your reference

Our reference

Date 6 March 1986

HKK 01012

RECEIVED IN REGISTRY

INDEX

1 4 MAR 1986

OFFICER

PA

ALGISTRY

Action Taken

MR LUCE'S MEETING WITH SIR Y K PAO

1. In preparation for Mr Luce's forthcoming meeting with Sir Y K Pao, I promised to let you have background upon Sir Y K's proposed scholarship fund for Chinese students, on his involvement in air service issues and on Chinese concerns over the development of representative governments in Hong Kong.

Scholarships

2.

When Sir Y K met the Prime Minister in October 1985 he proposed the establishment of a trust fund to enable more Chinese students to study in Britain. He offered to provide a capital sum of US$10m, and raise a similar amount from his private sector contacts, provided that the Chinese government made a commitment of US$20m and we put up US$10m. The fund would operate over 10 years. He said that Deng Xiaoping had already expressed willingness to him to participate in this scheme on these lines.

3

an important objective to

We have for some time regarded it as attract more Chinese students to Britain. In the current academic year, there are around 1200 students who have come here through governmental channels (compared with around 800 last year); of these, over 500 receive some support from HMG, the majority through the ODA.

4. Sir Y K's scheme offered an attractice and cost effective way to augment our efforts. Fortuitiously, the proposal came at the time when we were preparing to withdraw from UNESCO. The funds thereby released made it possible to contribute (although Sir Y K should not be made aware of this). The Prime Minister therefore wrote to Sir Y K accepting in principle his invitation to part- icipate subject to agreement on the details of implementation; but making clear that we could not provide a capital sum; we envisaged instead making annual grants of £700,000.

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