TNAG-1594-FCO40-2179-Honk-Kong-leading-personality-Sir-Yue-Kong-Pao--businessman-1987 — Page 47

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CONFIDENTIAL

BLDC will then produce a further revised draft for submission

to the NPC Standing Committee in 1990 and promulgation by the

NPC.

C. CIVIL AVIATION: DRAGONAIR

5.

DAL was incorporated in Hong Kong in September 1984.

6.

In October 1985 when Sir Y K acquired an interest in DAL, a

radical restructuring of the airline's shareholding took place,

apparently with the aim of meeting the necessary ownership and

control criteria. Details provided by DAL now suggest that the majority of shares are owned by British Nationals, with Sir Y K and

companies under his control accounting for about 35% of the total.

7.

In the case of Thailand Dragonair has begun scheduled

services to Thailand following its designation under the UK-Thailand

ASA in October 1987.

8.

In the case of the PRC, we held Government consultation from

3-5 June at which securing rights for Dragonair to serve points in

China was one of our objectives. Little progress was made but we

are still seeking traffic rights for Dragonair to serve up to five

points on the Chinese mainland, but not Peking or Shanghai.

D. SINO-BRITISH FRIENDSHIP SCHOLARSHIP SCHEME

9.

Under the Memorandum establishing the Scheme (signed by the

Secretary of State, Sir Y K Pao and Vice Premier Li Peng on 9 June

1986) China and the Sir Y K Pao Foundation will pay £1.4m per year, and Britain (ODA) will pay £700,000. The Scheme will pay for up to 420 PhD and research level awards each year for ten years.

first students will arrive in Britain in September.

The

CONFIDENTIAL