Kond
We
the Chinese of the importance of maintaining the prosperity of Hong Hong Kong should remain prosperous and continue to be a free
market place. We had solved the problem of the second airport. had reached agreement with the Chinese and the project would go
ahead. But there would be more problems over the next six years
until reversion in 1997. The Chinese would want to recreate Hong Kong into a communist image. They did not realise that communist institutions and a capitalist system were fundamentally
incompatible. We would be grateful for anything the Japanese could do to press home the point to the Chinese. Mr Hiraiwa agreed about the incompatibility and said that the Japanese would try to get the
message across.
9.
Mr Morita (Sony), speaking in English, said that he greatly
admired the UK's commitment to free trade in Europe. The EC should
not be a fortress. But to pursue this goal the UK needed a strong
industry. The UK had a good workforce and excellent engineers. Sony and many other Japanese manufaturers had been successful in the UK and made good products. But some British manufacturers (he
mentioned Thorn EMI) had largely given up manufacturing and had become sellers of other people's products. UK industry should
continue to manufacture. Japanese business know-how in quality control and modernisation technology was at the disposal of British
industry.
10. The Secretary of State thanked Mr Morita for making this important point and noted that he had made the same point at the meeting at No 10 the previous day.
11.
In conclusion Mr Hiraiwa said that he fully shared the Secretary of State's views on the excellent relationship between Japan and the UK. He was most grateful and encouraged by this and hoped this would continue.
12. The meeting closed at 10.50.
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Private notes are available after approval.