CONFIDENTIAL
FM HONG KONG
TO DESKBY 05140OZ FCO TELNO 687
OF 05114OZ MARCH 92
CONFIDENTIAL
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Pu MMB 10012
INFO IMMEDIATE PEKING, UKREP JLG HONG KONG
M
514
143014
MDHIAN 5645
TOP COPY Q DIST?
BUDGET: COMMENTS BY LU PING
1. LU PING TODAY (5 MARCH) TOLD HONG KONG REPORTERS IN GUANGZHOU, WHERE HE IS ATTENDING A MEETING OF THE MACAU BASIC LAW DRAFTING COMMITTEE, THAT YESTERDAY'S BUDGET SEEMED TO BE A POLICY OF RAISING REVENUE TO COVER EXPENDITURE, WHICH WAS NOT IN ACCORDANCE WITH THE BASIC LAW. MIFT CONTAINS A TRANSCRIPT OF WHAT LU SAID.
2. I WAS ASKED TO COMMENT ON THIS STATEMENT, WHICH I HAD NOT THEN SEEN, AT THE END OF A VISIT THIS AFTERNOON. I SAID THAT I HAD NOT SEEN LU'S COMMENT BUT THAT THE BUDGET FOLLOWED VERY MUCH
THE PHILOSOPHY THAT WE HAD ALWAYS FOLLOWED IN HONG KONG. FS WAS ALSO ASKED ABOUT LU'S REMARKS AT A PRESS CONFERENCE THIS AFTERNOON, AND DID NOT COMMENT.
3.
FS WILL ALMOST CERTAINLY BE ASKED ABOUT LU'S REMARKS TOMORROW (6 MARCH) WHEN HE IS GIVING A TV INTERVIEW AND WILL OTHERWISE BE AVAILABLE TO THE PRESS. HE WILL TAKE THE LINE THAT WE ARE PUZZLED BY LU'S REMARKS: THAT THE APPROACH TAKEN IN THIS YEAR'S BUDGET WAS VERY MUCH IN LINE WITH THE TRADITIONAL HONG KONG APPROACH THAT EXPENDITURE SHOULD BE IN LINE WITH THE GROWTH OF GDP: AND THAT IT IS HARD TO SEE THAT THIS IS INCONSISTENT WITH THE BASIC LAW: BUT IN ANY CASE THE BASIC LAW WILL NOT APPLY UNTIL
1997.
4.
LU HAS BEEN CAUGHT SEVERAL TIMES BY HONG KONG JOURNALISTS IN THE MARGINS OF THE BLDC MEETING (MY TELNO 680 REFERS). EVEN ALLOWING FOR THE DIFFICULTY OF DEALING WITH PERSISTENT QUESTIONING BY JOURNALISTS, HIS SERIES OF GRATUITOUS COMMENTS ON THE MANAGEMENT OF THE HONG KONG ECONOMY HAVE SHOWED A TIRESOME WILLINGNESS TO PREACH ON HONG KONG AFFAIRS WHICH GOES DOWN BADLY HERE. UP TO NOW, MOST OF HIS COMMENTS HAVE BEEN FAIRLY GENERAL AND WE HAVE BEEN ABLE TO DISREGARD THEM WITHOUT TOO MUCH DIFFICULTY. THIS TIME, HOWEVER, BY DIRECTLY CRITICISING THE BUDGET, AND ALLEGING THAT IT OFFENDS AGAINST THE BASIC LAW, HE
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