SECRET
(25A
SECRET
FM HONG KONG
TO DESKBY 21150OZ F C O
TELNO 885
OF 211215Z MARCH 91
INFO DESKBY 220001Z PEKING
INFO IMMEDIATE UKREP JLG HONG KONG
010132
MDHIAN 9014
PADS: THE WAY FORWARD:
MEETING WITH LU PING ON 23 MARCH
1.
MY OBJECTIVE IN THE MEETING WITH LU PING ON 23 MARCH WILL BE TO REACH AGREEMENT ON A PACKAGE. THIS WOULD INVOLVE MAKING COUNTER PROPOSALS IN RESPONSE TO THE CHINESE SUGGESTIONS ABOUT THE LEVEL OF HONG KONG'S FISCAL RESERVES, THE COMPOSITION OF THE AIRPORT AUTHORITY AND THE ESTABLISHMENT OF A CONSULTATIVE COMMITTEE. ON THE REST OF THE PACKAGE, I WOULD NEED TO GET FROM THEM SUFFICIENT FREEDOM OF OPERATION TO MAKE THE BUILDING OF THE NEW AIRPORT A VIABLE OPERATION.
2"
I WOULD WISH TO REACH AGREEMENT THAT, AS PORT OF THE PACKAGE, THE CHINESE SIDE SHOULD INDICATE CLEARLY ITS SUPPORT FOR THE PROJECT TO BUILD A NEW AIRPORT AT CHAK LAP KOK. THIS SHOULD INCLUDE REASSURING ANY POTENTIAL INVESTORS WHO ENQUIRE THAT, IN ACCORDANCE WITH THE BASIC LAW, OBLIGATIONS ENTERED OR GUARANTEED BY THE HONG KONG GOVERNMENT WOULD CONTINUE TO BE VALID AND RECOGNISED BY THE SARG AFTER 1997. AS AN INDICATION OF CHINESE SUPPORT FOR THE PROJECT, WE WOULD ASSUME THAT THE BANK OF CHINA PLAY A PART, FOR EXAMPLE IN SYNDICATING LOANS. WE WOULD HOPE THAT CHINESE CONSTRUCTIONS FIRMS WOULD COMPLETE IN THE NORMAL WAY FOR PROJECTS CONNECTED WITH THE AIRPORT. THE TASK OF CARRYING OUT THE PROJECT IN THE PERIOD UP TO 1997 SHOULD BE UNDER THE EFFECTIVE CONTROL OF THE HKG. WE WOULD AIM TO BUILD AS MUCH AS POSSIBLE BEFORE 1997.
THE FOLLOWING PARAGRAPHS CONTAIN THE POINTS THAT I WOULD WISH TO MAKE ON THE VARIOUS ELEMENTS OF THE PACKAGE.
3.
AIRPORT AUTHORITY
4.
I WOULD BE WILLING TO APPOINT A HONG KONG BASED INDIVIDUAL FROM THE BANK OF CHINA GROUP TO SIT ON THE AUTHORITY (WITHOUT VETO POWER). I WOULD EXPECT TO RECEIVE SUGGESTIONS FROM THE CHINESE SIDE AS TO WHO HE SHOULD BE. ONCE APPOINTED, WE WOULD
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