TNAG-2256-FCO40-3240-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-gene-1991 — Page 25

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27/10

Mr Grxm

Mr Stone /27/3

твой млазний

TU3 26/3 Thank you. The Savetary

State saw this shad it in mind at

naming's meeting

Private Secretary

26

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&

this

(24)

SECRET

Secrety & Hote

From:

Date:

Cc:

RA Burns

22 March 1991

PS/Lord Caithness PS/PUS

Sir J Coles

قلم الله

Mr Cornish, News Dept

(Personal)

Mr Paul, HKD

Mr Davies, FED Sir Arthur Watts,

Legal Adviser

нив 182. 1к

A

B

C

D

UA

HONG KONG : PADS : THE WAY FORWARD

1. As far as Hong Kong is concerned, there are two central issues to the Peking visit:-

2.

(a)

(b)

achieving a more productive dialogue, especially through re-energised JLG work: we are preparing a full speaking note on this;

a satisfactory agreement on the new airport.

Lu Ping accepted with considerable alacrity the Governor's invitation to visit Hong Kong again for private talks about the airport at Fanling Lodge - though we know from other sources that the Chinese consider that our negotiating position is weak.

3.

The Governor has sent me his negotiating brief. It is ambitious,

It also reflects the very limited flexibility open to the Governor. It is by no means certain that a deal can be struck this weekend. There is a strong likelihood, therefore, that the negotiations will drag on into the Peking visit. And we may be faced with some tough choices. I will submit next week on the logistic implications of that and on whether - and, if so, in what terms - a message from the Secretary of State might be advisable.

4. I have probed the Governor on certain aspects of his negotiating brief. I attach his reply. On the whole, this is satisfactory. I have discussed the issues with the Treasury. The Chancellor is likely to write to us warning of the need to avoid like the plague any suggestion that we should be responsible for any shortfall in the minimum level of fiscal reserves. These reserves (now around £70 billion) should not come under strain until nearer 1997. The Governor

Redacted Under FOI Exemption Sec 27(1)(a)(c)(d)

SECRET

/proposes

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