TNAG-2404-FCO40-3491-Hong-Kong-defence-and-public-order-1992 — Page 176

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There were some difficult decisions ahead as costs of the MTR

link to the new airport were predicted to double. It was not known

whether the Chinese were going to adopt a positive approach to this issue

or be difficult. The JLG was currently deadlocked on the Defence Lands issue and work was piling up. The Foreign Secretary was due to meet the

Chinese Foreign Minister in March. However, the FCO was not now sure

whether to press the Chinese on the Defence Lands issue given the

opposition an agreement might meet from LEGCO. It was important

therefore to try and reassure the Chinese that we, the British, were

trying hard to be constructive in our dealings, without creating the impression in Hong Kong that we were giving way on everything. Looking

plant was for th

tro ahead, the 1995 elections would conform to the Basic Law, but again it

would be hard to convince the Chinese that we were not deliberately trying to build in problems for them.

5. CBF Hong Kong then followed with the Hong Kong perspective. He said

that the Airport Agreement had been a watershed. It had given confidence

a boost and this had largely been sustained since last Autumn. That

said, periodic irritations were inevitable. Nevertheless, the barometers

were the Hang Seng which was lifting, and emigration which was reducing.

He stressed the fragility of confidence and the herd instinct, which had

always been part of the Hong Kong scene and Hong Kong's dependence on

events in China. In general therefore, in

in terms of confidence and

relations with China the situation was good. We should not however,

underestimate the influence and impact of the first directly elected members of LEGCO. They were likely to produce domestic difficulties and

constraints for the Government. As a result the DCA could well become an

issue again. The Liberals had already expressed the view that HMG should

meet 100% of costs.

6. CBF HK went on to say that on the Garrison front his HLB budget was

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