CONFIDENTIAL
FM HONG KONG
TO ROUTINE DTI
TELNO OTTER 83
OF 23103OZ APRIL 90
INFO ROUTINE FCO, PEKING
CONFIDENTIAL
024753
MDLIAN 5967
HK C 182 12
PERSONAL FOR ADAMS, HEAD OF PEP FROM HEAP
FCO PERSONAL FOR MARSDEN HKD
PEKING PERSONAL FOR AMBASSADOR
AIRPORT PROJECT
SUMMARY
1. A FEW QUESTIONS ARE BEING RAISED ABOUT THE AIRPORT PROJECT, PARTICULARLY OVER THE NEED FOR ENDORSEMENT BY THE CHINESE GOVERNMENT. THIS SHOULD NOT CAUSE US ANY ALARM, BUT IT IS A NEW
NOTE.
DETAIL
2. AT A PRESS CONFERENCE ON 19. APRIL SIR PIERS JACOBS, FINANCIAL SECRETARY, REPORTED ON RECENT DEVELOPMENTS ON THE AIRPORT PROJECT. ALTHOUGH HIS OPENING STATEMENT WAS WHOLLY OPTIMISTIC AND FORWARD LOOKING, THE PRESS HERE AND ELSEWHERE (E.G. FINANCIAL TIMES, A WALL STREET JOURNAL) HAVE GIVEN A MORE NEGATIVE INTERPRETATION. THEY HAVE FOCUSSED IN PARTICULAR ON A COMMENT THAT CHINESE GOVERNMENT SUPPORT FOR THE PROJECT WAS ESSENTIAL, AND ON SIR P JACOB'S COMMENT THAT HE HAD REPEATEDLY ASKED THE CHINESE GOVERNMENT TO SUPPORT IT, ONE OF THE OCCASIONS BEING A MEETING LAST WEEK WITH THEIR JLG REPRESENTATIVE. SIR P JACOBS WAS ALSO REPORTED AS SAYING THAT WHILE HONG KONG'S HKD 71 BILLION RESERVE COULD FUND MOST OF THE DEVELOPMENT, THE GOVERNMENT WOULD PREFER A MIX OF DEBT AND EQUITY AND THAT QUOTE WE NEED CHINESE SUPPORT UNQUOTE.
3. IN A STATEMENT ON 21 APRIL THE HONG KONG GENERAL CHAMBER OF COMMERCE ALSO CALLED FOR CHINESE GOVERNMENT SUPPORT WHILE WARMLY ENDORSING THE PROJECT.
4. LOCAL NEWSPAPERS OF 20 APRIL ALSO FEATURED A REPORT BY THE ''POLITICAL AND ECONOMIC RISK CONSULTANCY'' (WHO WE DO NOT KNOW) WHICH, WHILE PREDICTING A DIFFICULT 2 OR 3 YEARS FOR HONG KONG'S
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CONFIDENTIAL
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