TNAG-1896-FCO40-2690-Calls-on-Francis-Maude--Minister-of-State-for-Foreign-and-Co-1989 — Page 12

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4.

On the right of abode package, Mr Yaxley recommended that an announcement should not be made before the royal visit since however generous the package was, it would not be seen as generous

by all.

5. Mr Yaxley said that the Hong Kong government was doing all that it could to maintain confidence and was continuing with the large infrastructure projects planned, for example the airport and tunnel. There were good opportunities for British industry.

7%

Mr Yaxley noted that the British share of manufacturing industry investment was very low compared with other foreign countries comapred with Japan's 36% and the USA's 25%. He also pointed out that investment in Hong Kong was a good way to gain access to China. Mr Maude agreed that British industry should be encouraged further to invest in Hong Kong.

6. Mr Maude asked what more the British government could do to help restore confidence. Mr Yaxley considered that it was not so much what was done, but how it was presented. There was something of a feeling of having been abandoned in Hong Kong. People generally realised that any right of abode package could not be very generous. But if it was carefully designed and put across he felt that it could still go down well. Mr Yaxley mentioned that Mr Maude's strong and quick reaction to the Chinese comments over Barry Wiggham's speech had been very well received in Hong Kong.

Mr Maude said that he hoped to come to Hong Kong in the near future but that the visit would have to be in a passive mode, as at this stage he would not be able to come out with any solutions to the major problems. This would have to be made clear. Mr Yaxley agreed that the pre-visit press handling would need to be very careful, to make sure that expectations were not falsely raised. But he felt that if this was achieved, Mr Maude's visit should have

a good chance of being successful. Mr Maude said that Hong Kong Department would clear lines with Mr Yaxley when the details of the

visit were known.

8. Mr Yaxley mentioned that, as part of Hong Kong's continuing

effort to make MP's and the British press more aware of the

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