TNAG-2480-FCO40-3610-Business-matters-in-Hong-Kong-Swire-Group-1992 — Page 5

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CABINET OFFICE

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70 Whitehall, London SW1A 2AS Telephone 071-270 0101 Facsimile 071-270 0208

From the Secretary of the Cabinet and Head of the Home Civil Service Sir Robin Butler GCB CVO

Ref:

A092/3384

Dear Tun

1112

Copy the by fax

Jacqw Booker.

Arsions

27111192

695

15

25 November 1992

2. M. Moms to ostam Mary Kong

Marr's M. Buk/xi Brok 1/xi

Miss Samale 182/12

Sir Robin Butler was very grateful to you, Julie Osborne and John Foggo for the briefing provided for his lunch with John and

lunch with Adrian Swire and Sir James Spooner of the Swire Group today. addition to those three, three other directors were also present.

In

Sir Robin reported that the main part of the lunch was a briefing, given by John Swire, about the range of functions and interests of the Swire Group (copy of the summary enclosed). From a policy point of view, Sir Robin reported that the main interest of the discussion lay in what was said about Hong Kong and in particular the Governor's recent constitutional proposals.

Swire's were clearly shaken by the strength of the Chinese reaction. They sympathised with the proposition that, seen Chinese point of view, the exchange of letters between the Foreign and Commonwealth Secretary and his Chinese opposite number had constituted an agreement with which the spirit of the Governor's proposals was inconsistent. There was a debate within the company on whether, if the Governor accepted amendments to his two most contentious proposals namely the expansion of the electorate for the functional constituencies and the composition of the Election Committee the Chinese would then soften their line. John Swire took the view that they were so seriously affronted by what they saw as British bad faith that they would not. The representatives of the company also warned against linking the American decision on Most Favoured Nation status with the issue, since they believed that this would confirm the Chinese view that the British proposals were part of an international plot to destabilise the Government of China.

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-

The members of the Swire Group seemed more relaxed about the Air Services agreements which they believed would come through in time and the airport, which they expected to be constructed, though late.

Tim Simmons Esq

PS/Sir David Gillmore

Foreign and Commonwealth Office

/They said