TNAG-1999-FCO40-2846-Meeting-between-Douglas-Hurd--Secretary-of-State-for-Foreign-1990 — Page 11

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CONFIDENTIAL

LUNCH WITH SIR Y K PAO, 27 JUNE

References: A. Financial Times article

B. Economist article of 23

of 25 June

June and Far East

Economic Review article of 14 June about

Hong Kong's second cable network

C. Prime Minister's foreword to biography of

Sir Y K Pao

BACKGROUND

Telegon

Mailed

1.

Sir Y K Pao (71), although now in semi-retirement is

still one of Hong Kong's most influential figures. Since

fleeing to Hong Kong from Shanghai in 1949, he has amassed a

substantial fortune. His public companies alone account for

some 8% of Hong Kong's stockmarket capitalisation.

He

2. Sir Y K Pao's wealth and extensive business interests

give him considerable influence, both in the territory and

in China, where he has made a number of large donations.

was one of 8 vice-chairmen of the Basic Law Drafting

Committee and is supposed to be on good terms with Deng

Xiaoping. He was in Peking recently for the final,

celebratory meeting of the Basic Law Drafting Committee.

While there, he had dinner with Deng Xiaoping as he usually does on visits to Peking. Sir Y K Pao will probably wish to

give the Secretary of State an account of the dinner. The main thrust of Deng's remarks (which have appeared in the

press in Hong Kong) was that stability in China was essential for the countries of the region: if there was

instability, or even civil war, the numbers leaving China would cause chaos in the surrounding area, including Hong

Kong which therefore had a vested interest in China's

MAXAGB/2

CONFIDENTIAL