CONFIDENTIAL
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CONFIDENTIAL
FM HONG KONG
TO DESKBY 17130OZ FCO
TELNO 184
OF 171146Z JANUARY 91
HKB 182 12
18 J. 229
INFO IMMEDIATE PEKING, UKREP JLG HONG KONG
161
YRTELNO 96: PADS: THE WAY FORWARD
TOP COPY Q DIST?
ра
126420 MDHIAN 9078
1 I DO NOT THINK WE CAN SENSIBLY DECIDE THE WAY FORWARD UNTIL AFTER MY VISIT TO PEKING. I HOPE IT MAY BE POSSIBLE DURING THE VISIT TO GET A CLEARER IDEA OF EXACTLY WHAT THE CHINESE CONCERNS ARE, AND TO WHAT EXTENT THEY ARE ACTUALLY RELATED TO THE AIRPORT.
2. NEVERTHELESS, I AGREE THAT WE MUST HAVE SOME IDEA OF HOW WE MIGHT PROCEED IF THE CHINESE MAINTAIN THEIR PRESENT INTRANSIGENCE. YOU HAVE OUTLINED SOME OF THE MAIN OPTIONS: BUT MANY VARIATIONS ARE POSSIBLE. AND ONE OTHER OBVIOUS OPTION, HOWEVER UNPALATABLE, IS ABANDONING THE NEW AIRPORT ALTOGETHER.
3. IT IS NOT QUITE RIGHT TO SAY THAT YOUR OPTION A REPRESENTS THE TACTICS WE ARE PRESENTLY FOLLOWING. THESE ARE MORE LIKE A COMBINATION OF A AND C. WE HAVE CAREFULLY INCLUDED IN THE PAPER THAT MACLEOD HANDED OVER LAST WEEK A NUMBER OF POINTS THAT THE CHINESE COULD TAKE AS 'CONCESSIONS', WHICH REDUCE THE PROJECT IN SCALE AND REDUCE THE STRAIN ON OUR RESERVES. FOR EXAMPLE, THE SCALED DOWN AND DEFERRED VARIANTS OF THE AIRPORT RAILWAY AND THE POSSIBILITY OF BORROWING.
4. AS YOU POINT OUT, OPTION B IS WHAT THE CHINESE ARE ASKING FOR. IT CARRIES SUBSTANTIAL COSTS LOCALLY AND WOULD ONLY BE WORTH CONSIDERING IF WE COULD GET A GUARANTEE THAT THERE WOULD BE A SATISFACTORY OUTCOME WITHIN A SPECIFIED SHORT PERIOD OF SAY A MONTH OR SO. AT PRESENT THIS SEEMS UNLIKELY.
5. YOU SUGGEST THAT THE AIRPORT IS A SPECIAL PROJECT, IN THE SENSE THAT WE MIGHT BE ABLE TO HANDLE SUCH CONSULTATIONS IN A WAY THAT WAS NOT DAMAGING LOCALLY AND THAT THE GULF CRISIS MIGHT PROVIDE A CREDIBLE PRETEXT FOR INTRODUCING A BREATHING SPACE. I AM AFRAID THIS IS NOT SO. ANY PAUSE WOULD IMMEDIATELY BE SEEN AS A CLEAR SIGNAL THAT THE HONG KONG GOVERNMENT HAD BOWED TO CHINESE PRESSURE. ACTING IN THIS WAY WOULD ALSO INTRODUCE CONSIDERABLE DELAYS INTO AN ALREADY VERY TIGHT SCHEDULE, MAKING THE POST-1997
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CONFIDENTIAL
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