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CONFIDENTIAL
However unable to reach breakthrough on Hong Kong's airport plans. Chinese concern about impact on SAR Government finances. Talks (adjourned on 13 April) achieved some narrowing of differences. But important issues remain to be resolved. Need to take stock before resuming talks.
(for use with the Malaysians)
Delighted that the Hong Kong/Malaysia Air Services
Agreement was signed on 4 March in Kuala Lumpur.
Demonstrates confidence in the future of Hong Kong/Malaysia
aviation relations.
(for use with the Indonesians)
Understand that talks on the proposed separate Hong
Kong/Indonesia Air Services Agreement are scheduled for May. Look forward to rapid progress.
(for use with the Singaporeans)
Airport
- Talks adjourned amicably to give both sides a pause for
reflection.
Chinese remain suspicious and concerned over the cost of the airport and about the state of Hong Kong's fiscal
reserves in 1997. They want assurances about these and want to be "consulted" on important matters.
The Hong Kong Government have gone a long way to meet
these concerns. Now up against real constraints of
financial prudence.
And essential that Hong Kong Government able to maintain effective authority up to 1997.
DUNAFC/2
CONFIDENTIAL
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