TNAG-2263-FCO40-3259-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-inte-1991 — Page 26

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FM FCO

TO IMMEDIATE GUIDANCE

TELNO 204

OF 05150OZ JULY 91

CONFIDENTIAL

нко 182 16

TOP COPY @ DIST ?

(21

043456 MDHOAN 6743

AND TO IMMEDIATE ISLAMIC POSTS, OECD POSTS, OAS POSTS, OAU POSTS AND TO IMMEDIATE EAST EUROPEAN POSTS, BTC HONG KONG, PEKING

AND TO IMMEDIATE NICOSIA, PRETORIA, SINGAPORE, SEOUL, BANGKOK AND TO IMMEDIATE UKMIS NEW YORK, BIS NEW YORK, HOLY SEE

AND TO IMMEDIATE MANILA, WINDHOEK, HANOI, KATHMANDU, RANGOON AND TO IMMEDIATE VALLETTA, UKDEL NATO, UKMIS GENEVA, UKDIS GENEVA AND TO IMMEDIATE UKMIS VIENNA, KUWAIT, UKDEL STRASBOURG AND TO SAVING BELMOPAN, GEORGETOWN, KINGSTON, NASSAU, HAMILTON AND TO SAVING HONIARA, MONTSERRAT, NUKU'ALOFA, PORT MORESBY AND TO SAVING ST GEORGE'S, ST HELENA, ST VINCENT, TORTOLA AND TO SAVING TRISTAN DA CUNHA, ULAN BATOR, VILA, PORT STANLEY AND TO SAVING MANAGUA, SAN SALVADOR, SUVA, TARAWA

HONG KONG

INTRODUCTION

1. AN ANNOUNCEMENT WAS MADE SIMULTANEOUSLY IN LONDON, PEKING AND HONG KONG AT 08OOZ ON 4 JULY THAT THE BRITISH AND CHINESE GOVERNMENTS HAVE INITIALLED A MEMORANDUM OF UNDERSTANDING ON MATTERS CONCERNING THE CONSTRUCTION OF A NEW AIRPORT IN HONG KONG, AND RELATED ISSUES. WE ALSO ANNOUNCED THAT THE PRIME MINISTER WILL VISIT CHINA SOON FOR DISCUSSION ON INTERNATIONAL AND BILATERAL MATTERS AND TO SIGN THE MOU. STATEMENTS WERE LATER MADE IN BOTH HOUSES. YOU SHOULD HAVE RECEIVED TEXTS OF THE STATEMENTS AND MOU BY RETRACT.

"LINE TO TAKE

2. THE UNDERSTANDING ON THE AIRPORT IS A GOOD ONE, WHICH WILL GIVE THE HONG KONG GOVERNMENT THE CERTAINTY IT NEEDS TO PROCEED WITH THE PROJECT. IT SHOULD ALSO PROVIDE A MAJOR BOOST TO INVESTOR CONFIDENCE, BY DEMONSTRATING THAT HONG KONG WILL NOW BE ABLE TO PRESS AHEAD, WITH CLEAR CHINESE SUPPORT, WITH A KEY ELEMENT IN ITS AMBITIOUS FUTURE DEVELOPMENT STRATEGY. AGREEMENT WITH CHINA ON THIS ISSUE, WHICH HAS BEEN A BONE OF CONTENTION SINCE TIANANMEN, SHOULD OPEN A NEW PHASE OF MORE FRUITFUL COOPERATION REGARDING HONG KONG, WITH WIDE BENEFITS FOR THE TERRITORY.

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