CONFIDENTIAL
FM PEKING
TO IMMEDIATE FCO
TELNO 454
OF 04064OZ MARCH 88
INFO IMMEDIATE HONG KONG
15
MY TELNO.427:
CONFIDENTIAL
HKC 166/1
P
9
78
154754
MDHIAN 0403
MEETING AND DINNER WITH LI PENG.
1. MY MEETING WITH LI PENG LASTED FOR RATHER MORE THAN 20 MINUTES.
2. LI STARTED BY SPEAKING ABOUT THE DEVELOPMENT OF SINO/BRITISH RELATIONS DURING THE PAST FOUR YEARS. HE HIGHLIGHTED THE ACHIEVEMENT OF AGREEMENT OVER THE FUTURE OF HONG KONG, VISITS BY ''VERY SENIOR PERSONALITIES'' IN BOTH DIRECTIOINS AND THE LETTING OF IMPORTANT CONTRACTS TO BRITISH COMPANIES (HE MENTIONED DAYA BAY AND YUEYANG).
3. LI ASKED ME WHAT I THOUGHT ABOUT THE STATE OF CONFIDENCE IN HONG KONG. I SAID THAT I THOUGHT THAT IT WAS ON THE WHOLE GOOD. HIS SUPPLEMENTARY QUESTIONS SHOWED THAT HE WAS CHIEFLY INTERESTED IN THE STATE OF SENTIMENT ABOUT DAYA BAY. I SAID THAT I THOUGHT THIS WAS CONSIDERABLY BETTER THAN IT HAD BEEN. HE COMMENTED THAT WORK ON THE POWER STATION WAS NOW PROCEEDING SMOOTHLY: THE PROBLEM WHICH HAD ARISEN LAST YEAR OVER REINFORCING RODS HAD NOW BEEN SOLVED.
4. LI SAID THAT THE CHINESE GOVERNMENT WAS WORRIED ABOUT PRESSURE BY THE UNITED STATES ON HONG KONG TO REVALUE THE HONG KONG DOLLAR AGAINST THE US DOLLAR OR EVEN TO BREAK THE LINK BETWEEN THE TWO CURRENCIES. WHAT DID I THINK THE OUTCOME WAS LIKELY TO BE? I SAID I WAS SURE THAT THE HONG KONG GOVERNMENT WAS DETERMINED TO CONTINUE TO RESIST PRESSURE FOR EITHER REVALUATION OR FOR THE DISSOLUTION OF THE LINK. LI TURNED TO ZHOU NAN AND SAID THAT THIS WAS INDEED GOOD
NEWS.
5. THERE FOLLOWED EXCHANGES ABOUT CHINESE POSTGRADUATE STUDENTS, IN THE UNITED KINGDOM AND THE UNITED STATES, AND ABOUT CONVERSATIONS ABOUT INTERNATIONAL ISSUES (GLOBAL AND REGIONAL) BETWEEN SENIOR OFFICIALS. I SHALL REPORT THE SUBSTANCE BY LETTER.
6. AT THAT MOMENT, THE ARRIVAL OF THE FRENCH AMBASSADOR AND HIS PARTY WAS ANNOUNCED. LI RECEIVED THEM SEPARATELY FOR ABOUT 10
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CONFIDENTIAL
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