TNAG-2452-FCO40-3569-Future-of-Hong-Kong-constitutional-development-1992 — Page 76

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political authorities but reflected a commercial judgement on the part of mainland Chinese construction companies.

6.

The strongest views I have heard expressed have come from the top of HKSB and Standard Chartered, perhaps reflecting the fact that both banks are vulnerable, each having considerable ambitions for expansion in China and both going through a difficult phase; the Midland Bank take-over on the one hand and Indian liabilities on the other.

On 27 November I called on Gordon Wu for a general chat (recorded in my tels 253 to DTI and 5 to Bangkok). He has expanded dramatically within China and had had what he considered a particularly successful few days in Canton. I happened to say in passing that he appeared unaffected by fall-out from current problems between Hong Kong and the mainland. He replied that he never became involved in or discussed politics and so was entirely unaffected. He was as bullish as ever about his China business prospects. He then launched into a 20 minute analysis

of the situation.

8.

A number of themes ran through his exposition

a.

He had great admiration for Mr Patten and liked him personally but he feared the Governor faced a "tough and lonely" period ahead. He had little respect for Hong Kong politicians and expected their enthusiasm for democracy to diminish once the pressure was turned on, as would the public following;

b. he remained totally opposed to the Airport Project which he considered extravagant, over-administered and inefficiently planned. (I think his views are well enough known). He had made no secret of his views to the Chinese Government when his opinion was sought;

his strong personal antipathy to the Chief Secretary surfaced time and again: he, Wu, claimed to have been labelled "the most stupid man in Hong Kong";

c.

d. compromise or even conceivably a success for the Governor had been possible up until the time Deng Xiaoping had gone on record. He believed he knew the Chinese well: there was one hard rock and once that had been planted in Mr Patten's way he foresaw no progress. He believed the Chinese were not over-excited about elections for the District Boards, which they did not regard as a threat to their authority, but they would not compromise on changes in

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CONFIDENTIAL