TNAG-2079-FCO40-2959-Hong-Kong-press-coverage-and-reports-1990 — Page 78

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HE SAID THAT CHINA DID NOT INTEND TO RESTRICT THE SOURCE OF FUNDING FOR THE COMPANIES TO BE AWARDED THE FRANCHISES.

4.

ANTHONY GALSWORTHY MADE CLEAR THAT THE FRANCHISES HAD NOTHING TO DO WITH THE NEW AIRPORT AND SAID THAT THERE WERE NO INDICATIONS THAT THE CHINESE WISHED TO BE INVOLVED IN DECISIONS AS TO WHICH ENTITY SHOULD BE AWARDED ANY PARTICULAR FRANCHISE, ADDING THAT DECISIONS OF SUCH MATTERS WERE FOR THE HK GOVERNMENT BEFORE 1997 AND THE SAR GOVERNMENT AFTER 1997. HOWEVER, HE SAID THAT THE HK GOVERNMENT WOULD LISTEN IF CHINA HAD AN OPINION ON THE AWARDING OF FRANCHISES.

5. MARTIN LEE SAID THAT IT WAS RIGHT FOR THE HK GOVERNMENT O

INFORM THE CHINESE ABOUT FRANCHISE ARRANGEMENTS BUT THAT THE CHINESE SHOULD NOT HAVE DECISION-MAKING POWERS.

HK BANK

6. THE NEWS THAT THE HK AND SHANGHAI BANK WOULD BECOME A WHOLLY OWNED SUBSIDIARY OF A HOLDING COMPANY INCORPORATED IN THE UK TOPPED MEDIA COVERAGE (18.12). CHAIRMAN OF THE BANK WILLIAM PURVES SAID THAT THE BANK WAS NOT TURNING ITS BACK ON HK AND THAT IT HAD FULL CONFIDENCE IN THE TERRITORY. HE SAID THAT THE DID NOT THINK THAT THE MOVE WOULD UPSET CHINA AND THAT HE HAD ACTUALLY HELD TALKS ON THE ISSUE WITH MANY SENIOR CHINESE OFFICIALS, INCLUDING PREMIER LI PENG. SIR DAVID WILSON SAID THAT THE WAY IN WHICH THE HK BANK WAS RESTRUCTURING WAS DESIGNED PRECISELY TO ANSWER TO HK'S NEED FOR A STRONG BANK, AN EFFECTIVE BANK, COMMITTED TO HK, ABLE TO OPERATE THROUGHOUT THE WORLD. SIR PIERS JACOBS SAID THAT THE PROPOSED REORGANISATION WAS A COMMERCIAL RESPONSE TO COMMERCIAL PROBLEMS IDENTIFIED BY THE BANK AND THAT IT WOULD NOT UNDERMINE CONFIDENCE

IN HK. FCO SPOKESMAN IN HK CHRISTOPHER OSBORNE SAID IT WOULD NOT

AFFECT SINO-BRITISH RELATIONS.

7. GUO FENGMIN SAID THAT ACCORDING TO THE JD, THE BRITISH GOVERNMENT SHOULD BE RESPONSIBLE FOR THE STABILITY AND PROSPERITY OF HK BEFORE 1997 AND THAT A BANK LIKE THE HK BANK SHOULD REALISE

THE POSSIBLE EFFECTS OF SUCH ACTIONS.

8. JOSEPH CHENG OF THE OPEN LEARNING INSTITUTE SAID THE MOVE WAS ONLY A SECURITY MEASURE OF THE BANK BUT MIGHT DEAL A BLOW TO LOCAL CONFIDENCE. LEGCO MEMBER JIMMY MCGREGOR WELCOMED THE MOVE, SAYING THAT IT WAS SENSIBLE AND WOULD BE IN THE LONG-TERM INTEREST OF HK. MARTIN LEE SAID THAT THE MOVE WOULD AFFECT LOCAL CONFIDENCE AND LEAD TO MORE CHANGES IN DOMICILE BY OTHER COMPANIES. FINANCIAL

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