TNAG-1464-FCO40-1991-Visits-by-Chinese-officials-to-the-UK--including-visit-by-Hu-1986 — Page 153

GRS 500

CONFIDENTIAL

FM HONG KONG

TO DESKBY 0908OOZ FCO

TELNO 1767

OF 090225Z JUNE 86

INFO IMMEDIATE PEKING

CONFIDENTIAL

HKK 024/20 RECEIVE

15.

1 1 JUN 1986

DESK OFFICIA

INDE.

LA

220

PA

Act.or

AJB11/6

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WISINT OF HU YAOBANG: HONG KONG SENTIMENT.

1. MANUSTERS MAY WISH TO HAVE AN UP-TO-DATE ESTIMATE OF FEELING KN HONG KONG AT THE PRESENT TIME AS BACKGROUND TO ANY DISCUSSION WHICH MAY OCCUR ON THAS POINT WITH HU YAOBANG HIMSELF; ZHOU NAN OR OTHERS.

2. THERE ARE TWO CLEAR AND SEPARATE DIMENSIONS. OVERSEAS INVESTMENT MINTEREST REMAINS STRONG AND WE CAN POINT TO THREE OR FOUR EXAMPLES OF THIS, SUCH AS THE JAPANESE CONSORTIUM UNDERTAKING THE SECOND CROSS-HARBOUR TUNNEL: THE EXPANSION OF THE CONTAINER PORT: THE EASTERN CORRIDOR UNDERTAKING: LIGHT RAIL TRANSPORT IN THE TUEN MUN CORRINDOR: CONTINUING AMERICAN MANUFACTURING INVESTMENT WITH A NEW HNTEREST IN THENS BY JAPANESE COMPANIES SEEKING REFUGE FROM THE HIGHER DOMESTIC COSTS OCCASIONED BY THE STRONGER YEN.

́ ́3. INTERNALLY, THE PICTURE IS DIFFERENT. THERE IS AN AHER OF PESSIMISM WHICH IS NOW REGULARLY COMMENTED ON BY WESITORS TO HONG KONG WHO SCALL TO SEE ME. THIS IS NOT ENGENDERED BY ANY PARTICULAR CAUSE: AND INT IS PARTLY SELF-INDUCED BY PRESS COMMENT ON NIT. IT AS LARGELY THE CONSEQUENCE OF UNCERTAINTHES ABOUT 1997 BUT FACTORS CONTRIBUTING TO HIT ARE ALSO WORRMES ABOUT PROTECTIONISM AND UNCERTAIN MARKETS #N THE UNITED STATES: ABOUT RETRENCHMENT IN THE CHINESE ECONOMY LEADING TO A SUBSTANTIAL REDUCTION OF EXPORTS AND RE-EXPORTS THERE: ABOUT THE WAY **N WHICH THE DISCUSSIONS IN THE SPECIAL GROUP OF THE BASINC LAW DRAFTING COMMITTEE ON THE FUTURE POLITICAL STRUCTURE ARE BEING HANDLED: ABOUT LACK OF DOMESTIC REINVESTMENT IN HINDUSTRY, ETC. ETC. EVENTS IN CHINA ARE ALSO MAKING SOME IMPACT FOR EXAMPLE STORMES

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ABOUT DENG'S SUPPOSED OPPONENTS SUCH AS CHEN YUN HAVING AN INCREASING INFLUENCE: ABOUT CORRUPTION: ABOUT LAW AND ORDER AND MN PARTICULAR THE RECENT EXECUTION KN CANTON OF A FORMER HONG KONG RESIDENT FOR A THEFT OFFENCE WHICH WOULD PROBABLY HAVE GOT HIM 5 YEARS HERE (NOT THE ONLY EXAMPLE OF A LIBERAL USE OF THE DEATH PENALTY) ETC.

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