TNAG-1468-FCO40-1997-Visits-by-members-of-the-Office-of-the-Unofficial-Members-of-1986 — Page 150

GRS 500

CONFIDENTIAL

FM HONG KONG

TO DESKBY 09080OZ FCO

TELNO 1767

OF 090225Z JUNE 86

SONFO IMMEDIATE PEKHING

CONFIDENTIAL

24

रा

WISINT OF HU YAOBANG: HONG KONG SENTIMENT.

1. MONUSTERS MAY WISH TO HAVE AN UP-TO-DATE ESTIMATE OF FEELING #N

HONG KONG AT THE PRESENT TIME AS BACKGROUND TO ANY DISCUSSION WHICH

MAY OCCUR ON THIS POINT WITH HU YAOBANG HIMSELF, ZHOU NAN OR OTHERS.

2. THERE ARE TWO CLEAR AND SEPARATE DIMENSIONS. OVERSEAS INVESTMENT INTEREST REMAINS STRONG AND WE CAN POINT TO THREE OR FOUR EXAMPLES OF

THIS, SUCH AS THE JAPANESE CONSORTINUM UNDERTAKING THE SECOND CROSS-HARBOUR TUNNEL: THE EXPANSION OF THE CONTAINER PORT: THE

EASTERN CORRIDOR UNDERTAKING: LIGHT RAIL TRANSPORT THE TUEN MUN

CORRENDOR: CONTINUING AMERICAN MANUFACTURING INVESTMENT WITH A NEW

"INTEREST IN THINS BY JAPANESE COMPANHES SEEKING REFUGE FROM THE

HIGHER DOMESTIC COSTS OCCASIONED BY THE STRONGER YEN.

3. INTERNALLY, THE PICTURE IS DIFFERENT. THERE IS AN AIR OF PESSIMISM

WHICH INS NOW REGULARLY COMMENTED ON BY WISITORS TO HONG KONG WHO CALL TO SEE ME. THIS IS NOT ENGENDERED BY ANY PARTICULAR CAUSE: AND

IT IS PARTLY SELF-INDUCED BY PRESS COMMENT ON HIT. HT #S LARGELY THE

CONSEQUENCE OF UNCERTAINTIES ABOUT 1997 BUT FACTORS CONTRIBUTING TO

HHT ARE ALSO WORRIES ABOUT PROTECTIONSFSM 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 IN WHICH THE DISCUSSIONS. HAN THE SPECIAL GROUP OF THE BASINC

LAW DRAFTHING COMMITTEE ON THE FUTURE POLITICAL STRUCTURE ARE BEING

HANDLED: ABOUT LACK OF DOMESTIC RE-INVESTMENT IN #NDUSTRY, ETC. ETC.

EVENTS IN CHINA ARE ALSO MAKINNG SOME IMPACT FOR EXAMPLE STORIES

-

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 HUM 5 YEARS HERE (NOT THE ONLY EXAMPLE OF A LIBERAL USE OF THE

DEATH PENALTY) ETC.

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