TNAG-2146-FCO40-3065-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-1990 — Page 19

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setting a bad precedent in the run-up to 1997.

3. There was widespread concern in Kowloon City at China's

remarks on PADS and the Reserve Fund.

Contacts were con-

Grassroot contacts

fused by contradictory statements given by HKG and LU Ping over the financial implications of PADS.

were annoyed, and thought China should not interfere in Hong Kong's domestic decisions prematurely. Contacts were quite confident that HKG was committed to the long term interest of

the Territory. Contacts considered China's worries over the financial burden unfounded, but contacts thought strongly that more information should be released on the financial arrange- ments of the project. Middle class and professional contacts

felt there was an element of truth in China's accusations, that

it was not in China's interest to wreck Hong Kong, and China's

concern over the possible exhaustion of the Reserve and Exchange Funds must be genuine. Contacts speculated that maybe PADS was intended to favour British and foreign investors, and China was unhappy about this, and hoped to gain some advantage for its own interest by undermining the project. Contacts remain supportive of the relocation of the Airport and are con-

cerned that China's opposition to PADS will hinder removal of the

site from Kowloon. Contacts are genuinely concerned that the almost incessant rows are indicative of poor Sino-Hong Kong relations, which contacts saw as deterimental to Hong Kong's prosperity and stability, and was undoubtedly undermining local

confidence.

4.

Contacts in Mong Kok felt the open debate between CPG/HKG

on PADS demonstrated the mutual distrust between the two govern- ments. Some contacts thought China should not openly accuse HKG of using the fiscal reserves for PADS as this could adversely affect Hong Kong's confidence.

Contacts were all the more

worried that China's negative attitude towards PADS would dis-

courage foreign consortia from participation in the project.

Some contacts were worried that financing the project would

strain HKG's financial resources and used up fiscal reserves.

/ Contacts....

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