CONFIDENTIAL
024753
MDLIAN 5967
ECONOMY, SUGGESTS CHINA MAY TRY TO ASSERT ITS DOMINANCE OVER HONG KONG WITHIN THAT PERIOD BY PICKING THE PORT AND AIRPORT PROJECT AS AN ISSUE WITH WHICH TO CHALLENGE THE HONG KONG GOVERNMENT IN AN ATTEMPT TO ACCELERATE THEIR OWN CONTROL OVER THE DECISION MAKING PROCEDURES WELL BEFORE 1997. THE REPORT ADDS THAT WITHOUT CHINA'S SUPPORT THERE IS LITTLE PROSPECT OF THE PROJECT FINDING THE NECESSARY PRIVATE SECTOR INTEREST.
5. SIR P JACOBS HAS CONFIRMED TO ME THAT HIS PRESS CONFERENCE WAS INTENDED TO BE WHOLLY OPTIMISTIC AND HE FELT THE PRESS HAD BEEN WRONG TO GIVE HIS COMMENTS A NEGATIVE SLANT. A JOURNALIST WHO WAS THERE HOWEVER HAS COMMENTED THAT IT WAS INEVITABLE THAT THE REPORTS WOULD PICK UP THE STRESS ON THE CRUCIAL NATURE OF CHINA'S SUPPORT SINCE THAT SUPPORT WAS SIMPLY NOT THERE, AT ANY RATE AT PRESENT.
6. THESE ARE AMONG THE FIRST PUBLICLY AIRED EXPRESSIONS OF ANXIETY ABOUT THE PROJECT, ALTHOUGH PRIVATELY MANY PEOPLE HERE HAVE BEEN SAYING FOR SOME TIME THAT IT MAY YET BE MUCH MORE DIFFICULT TO ATTRACT PRIVATE INVESTMENT INTO THE PROJECT THAN GOVERNMENT STATEMENTS ALLOW, AND THAT IN ANY EVENT CHINA'S ENDORSEMENT WILL BE ESSENTIAL BEFORE FUNDS ARE FORTHCOMING FROM THE OVERSEAS PRIVATE SECTOR.
7. DURING HIS LAST VISIT, LORD YOUNG ALSO AIRED SOME DOUBTS ABOUT THE PROJECT TO ME IN A PRIVATE CONVERSATION. HE SAID HE THOUGHT IT ODD THAT AIRPORT PROJECTS SHOULD BE PROCEEDING CONCURRENTLY SO CLOSE TOGETHER IN HONG HONG, MACAO, AND SHENZHEN, AND THAT GIVEN THE EXPENSE AND GEOGRAPHIC DIFFICULTIES OF THE HONG KONG PROJECT IT MIGHT MAKE MORE SENSE FOR HONG KONG TO TAKE OVER SHENZHEN DEVELOPMENT THUS AVOIDING THE NEED FOR EXTENSIVE LAND RECLAMATION, BRIDGES ETC, (HE SAID HE PROPOSED TO PUT THESE THOUGHTS TO THE GOVERNOR: I DO NOT KNOW WHETHER HE DID SO).
8. CLEARLY NONE OF THIS SHOULD DETER US OR BRITISH COMPANIES FROM
GOING FULL SPEED AT THIS PROJECT WHICH IS IMPORTANT TO HONG KONG IN A VARIETY OF WAYS. AT THIS STAGE COMPANIES NEED TO BE DOING ALL
THEY CAN TO GET THEMSELVES ON THE STARTING GRID. THERE IS HOWEVER A BIG JUMP TO GET OVER WHEN COMPANIES AND GROUPS ARE ASKED TO PUT IN VERY LARGE SUMS OF EQUITY, PARTICULARLY IN RESPECT OF THE BRIDGES AND RAILWAY LINK WHERE TRAFFIC RETURNS CANNOT BE VERY HIGH ON ANY NORMAL SCALE AND PARTICULARLY IF CHINA HAS NOT DECLARED ITS WHOLE HEARTED SUPPORT. THESE ARE PROBLEMS THAT THE VARIOUS FINANCIAL CONSULTANCIES WILL BE CONSIDERING AND FOR WHICH THEY ARE LIKELY TO HAVE ANSWERS SINCE NONE OF THEM ARE NEW. NEVERTHELESS THIS SLIGHT
2
PAGE
CONFIDENTIAL
Page 45Page 46
No comments yet.
Private notes are available after approval.