TNAG-2079-FCO40-2959-Hong-Kong-press-coverage-and-reports-1990 — Page 71

UNCLASSIFIED

FM HONG KONG

HKB301

RECEIVED IN ~

0 2 JAN 1991

DESK C

INDEX

TO PRIORITY FCO

TELNO 3809

OF 270253Z DECEMBER 90

UNCLASSIFIED

Fund

La press

A127112

&

INFO ROUTINE HONG KONG GOVERNMENT OFFICE LONDON INFO ROUTINE PEKING, UKREP JLG HONG KONG, UKMIS GENEVA INFO ROUTINE HKGO WASHINGTON, HKGO NEW YORK, HKGO GENEVA INFO ROUTINE HKGO SAN FRANCISCO

84

044146

MDLIAN 6936

HONG KONG AGREEMENT: PRESS COVERAGE : WEEKLY ROUNDUP

SUMMARY

1. THE HK BANK ISSUE CONTINUED TO DRAW EXTENSIVE COVERAGE WHILE OTHER NEWS ITEMS RELATED TO HK'S FUTURE, THE PADS PROJECT AND NATIONALITY RECEIVED MODERATE PLAY.

FUTURE

HK BANK

2. MORE REACTIONS TO HK BANK'S RESTRUCTURING WERE CARRIED BY THE MEDIA (19-24.12). A SPOKESMAN FOR CHINA'S FOREIGN MINISTRY, LI ZHAOXING, WAS QUOTED AS SAYING THAT THE CHINESE GOVERNMENT BELIEVED THAT AS AN IMPORTANT FINANCIAL AND COMMERCIAL INSTITUTION, THE HK BANK SHOULD SEE TO IT THAT ANY NEW MEASURES IT TOOK WOULD HELP PROMOTE RATHER THAN UNDERMINE THE STABILITY AND PROSPERITY OF HK. THE DIRECTOR OF THE HK AND MACAU AFFAIRS OFFICE, LU PING, TOLD A DELEGATION OF THE KOWLOON CITY DISTRICT BOARD THAT THE CHINESE GOVERNMENT HAD ALREADY EXPECTED THAT THE HK BANK WOULD CHANGE ITS DOMICILE BUT THAT HE HOPED THAT VARIOUS SECTORS WOULD ATTACH WEIGHT TO HK'S OVERALL INTERESTS AND TRY TO MAINTAIN THE TERRITORY'S STABILITY AND PROSPERITY. THE HK ECONOMIC JOURNAL QUOTED A BANK OF CHINA SPOKESMAN AS SAYING THAT THE STATUS OF HK BANK WAS FAR FROM BEING ORDINARY AND THAT ITS CHANGE OF DOMICILE WOULD HAVE RELATIVELY MAJOR IMPLICATIONS. IF OTHER CONSORTIA IN THE TERRITORY FOLLOWED SUIT, THE STATUS OF HK AS AN INTERNATIONAL FINANCIAL CENTRE MIGHT BE AFFECTED. QUOTING SOURCES, THE HK ECONOMIC TIMES SAID THAT CHINA CONSIDERED THAT THE HK BANK MOVE WAS ACTUALLY BENEFICIAL TO CHINA AS THIS WOULD RESULT IN THE CONTROL OF MONEY BEING LEFT IN THE HANDS OF THE SAR GOVERNMENT.

3. ECONOMIST LAW CHEUNG-KOK TOLD THE HK ECONOMIC JOURNAL THAT HE BELIEVED THAT HK BANK HAD INFORMED THE CHINESE SIDE ON THE RE-