TNAG-2031-FCO40-2894-Visit-by-Douglas-Hurd--Secretary-of-State-for-Foreign-and-Co-1990 — Page 41

CONFIDENTIAL

FM BTC HONG KONG

TO DESKBY 09130OZ FCO

TELNO 10

OF 09110OZ

JANUARY 90

AND TO IMMEDIATE DTI

CONFIDENTIAL

176522 MDADAN 0937

ADVANCE COPY

FOR PAUL, HKD

DTI FOR ADAMS PEP

MY TELNOS 2, 3 AND 8 AND MY LETTER OF 19 DECEMBER TO MACLAREN: TRADE WITH HONG KONG AND THE SECRETARY OF STATE'S VISIT

SUMMARY

1. THE RECENT DECISION BY THE HONG KONG GOVERNMENT TO SHORT LIST FIVE AMERICAN COMPANIES AND ONE EACH FROM FRANCE, HOLLAND AND JAPAN, TO THE EXCLUSION OF ALL BRITISH COMPANIES, IN THE FIRST SIGNIFICANT CONTRACT IN THE 10 BILLION POUNDS AIRPORT PROJECT, IS SUFFICIENTLY DISTURBING THAT I SUGGEST IT MIGHT BE RAISED DURING THE SECRETARY OF STATE'S VISIT.

DETAIL

2. BRIEFING FOR THE SECRETARY OF STATE'S VISIT AS DETAILED IN YRTELNO 42 INCLUDES MAJOR PROJECTS (BRIEF M), THE AIRPORT (BRIEF P) AND THE U K-HONG KONG TRADE (BRIEF N). I DO NOT KNOW WHAT LINE WILL BE TAKEN IN THESE, BUT OFFER THE FOLLOWING COMMENTS ON RECENT DEVELOPMENTS, INCLUDING THE REPORTED PRESSURES BY THE UNITED STATES TO STEER CONTRACTS THEIR WAY ON THE AIRPORT PROJECT (MY FIRST TUR).

THE HONG KONG GOVERNMENT FREQUENTLY SAYS, AND I HAVE REPORTED IT Y TIMES, THAT THERE WILL BE NO SPECIAL FAVOURS FOR BRITISH

JMPANIES IN THE AIRPORT PROJECT OR ELSEWHERE. I SUGGEST THAT THIS COULD BE CHALLENGED. AS DETAILED IN MY LETTER TO MACLAREN, THERE HAVE BEEN RECENT OCCASIONS WHERE IT SEEMS REASONABLE THAT ACCOUNT COULD BE TAKEN OF THE BRITISHNESS OF SOME OF THE CONTESTANTS FOR CERTAIN CONTRACTS.

4. OF CURRENT CONCERN IS THE ANNOUNCEMENT REPORTED IN MY TELNO 2 THAT NO WHOLLY BRITISH FIRM OR PARTNERSHIP IS THOUGHT WORTHY OF INCLUSION IN A SHORT LIST OF EIGHT FOR THE CONSULTANCY FOR THE AIRPORT MASTER PLAN. CHALCROW OF THE UK ARE INCLUDED WITH BECHTEL OF THE U.S.A. AS ONE OF THE EIGHT, BUT BECHTEL ARE SO LARGE AND SO GOOD THAT HALCROWS' PART WILL SURELY BE MUCH THE SMALLER). SEVERAL

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CONFIDENTIAL