running Hong Kong. In discussing any problem, it was necessary to take account of many factors. He instanced Shanghai with a population of 10 million.
It would be easy for Shanghai to develop
like Hong Kong, but if this happened people would crowd into Shanghai. So China pursued development on a broader front. China had to adopt policies which paid attention to the overall situation.
7. The Governor commented that there was a long term and a short term problem. He would certainly encourage investors to help with the long term problem. If there was a profit involved then no encouragement would be needed. In the short term, as the Vice-Premier had said, measures would be necessary if the standard of living was not to be undermined. Shanghai was at least flat, whereas Hong Kong possessed no space.
8.
Deng Xiaoping replied that Shanghai had reached saturation point and that Guangdong was also too big with insufficient employment. Investment would create employment and release pressure on Hong Kong. He said that China was considering legislation to protect the profits of investors. They would protect the interests of Chinese, Overseas Chinese and foreign investors. Outside investors could adopt their own management methods, which would be protected by law. They could assist with the marketing of Chinese goods. The Governor confirmed that he would encourage investors. He saw no problem at the official level which could not be solved through discussions.
9. Deng Xiaoping agreed that these issues could be pursued elsewhere. Reverting to the New Territories lease, he said that he formally requested the Governor to ask investors to put their hearts at ease. It was China's long term policy to regard Hong Kong as a special case, no matter what political solution was reached by 1997. The Covernor said that the problem could not be overcome by generalised assurances. What he had in mind was replacing the leases valid to 1997 with leases valid as long as Britain administered the New Territories. This would get rid of the date.
10. Deng Xiaoping commented that it would be best to avoid wording which mentioned British administration. It would be better to say
comunum
that, since the Chinese Government had expressed its political view, all would be well for investment. The future of Hong Kong was
SECRET
/guaranteed
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