SECRET
50
157163
MDHIAN 7731
CONSEQUENCES NOT ONLY ECONOMICALLY BUT IN TERMS OF THE AUTHOR11Y OF THE HK GOVERNMENT AND INVESTORS' CONFIDENCE IN THE FUTURE.
3. THAT SAID, I DO AGREE THAT WE SHOULD SEEK, IN OUR NEGOTIATIONS OVER THE PARTICULAR ISSUE OF THE AIRPORT, TO ESTABLISH PRINCIPLES WHICH CAN BE APPLIED GENERALLY IN ANY LATER CASES WHERE SIMILAR QUESTIONS ARISE. I ASSUME THAT THE GENERAL ASSURANCES REFERRED TO IN PARA 4 OF SECOND TUR WOULD INCLUDE A FAIRER WIND FOR THE JLG AND IN OTHER AREAS. HOWEVER I BELIEVE WE HAVE A DIFFICULT ENOUGH TASK AS IT IS DEALING WITH THE SPECIFIC QUESTION OF THE AIRPORT, ESPECIALLY GIVEN A TIME FRAME FORESHORTENED BY THE SECRETARY OF STATE'S VISIT. I FEAR THAT DRAWING BROADER POINTS INTO THE LETTER TO LU PING, OR INDEED THE GOVERNOR'S DISCUSSIONS WITH HIM, MIGHT RISK OVERLOADING. I THINK THE IDEAL WOULD BE FOR US TO HAMMER OUT SOMETHING SPECIFIC ON THE AIRPORT WITH LU PING IN HONG KONG, LEAVING, IF NECESSARY, A LAST STEP TO BE TAKEN DURING THE SECRETARY OF STATE'S VISIT. IN THE GOVERNORS' DISCUSSIONS, SOME MENTION COULD BE MADE OF THE BROADER QUESTIONS. THIS WOULD OPEN THE WAY FOR THE SECRETARY OF STATE TO USE AGREEMENT ON THE AIRPORT TO LAUNCH AN IMPROVED RELATIONSHIP OVERALL. THIS LATTER IS PLAINLY A WORTHWHILE FURTHER OBJECTIVE: BUT I BELIEVE IT WOULD
BE BETTER ACHIEVED IN THE SECRETARY OF STATE'S VISIT.
4. PARA 3 OF SECOND TUR ASKED WHICH VERSION OF THE PROJECT WE WERE EXPECTING THE CHINESE TO SUPPORT. AS WE MADE CLEAR IN OUR TELNO 741 (PARA 8), WE WOULD WISH TO LEAVE OUR OPTIONS OPEN. WE WOULD NOT WISH TO BE PINNED DOWN TO A PARTICULAR ONE OF THE FOUR.
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5. THIRD TUR ASKED FOR FURTHER COMMENTS ON THE PROS AND CONS OF
STARTING WITH HKD 10 BILLION OR HKD 14 BILLION. GIVEN TURS AND THE FOREGOING, I ASSUME THIS QUESTION IS NO LONGER RELEVANT AS FAR AS THE LETTER TO LU PING IS CONCERNED. WE WILL STILL NEED TO CONSIDER IT, OF COURSE, WHEN WE WORK OUT TACTICS FOR THE MEETING. BUT I SUGGEST WE COULD DO THAT AFTER THE GOVERNOR'S RETURN. WE ARE PREPARING AN OVERALL POSITION PAPER TO BE READY FOR THE GOVERNOR'S RETURN AND SUBSEQUENT DISCUSSION BY EXCO ON 19 MARCH.
Redacted Under FOI
Exemption Sec 27(1)(a)(c)(d)
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