19
CONFIDENTIAL
1.
The main contracts coming on in the immediate future are the
30 year franchise for the Western Harbour Crossing for award in mid-1993, Hong Kong Electric's Scheme of Control which will
expire on 31 December 1993, a fixed local telecommunications
network licence to be awarded for 15 years in 1993, three 15
year landfill contracts to be awarded in October/November 1993,
and 15 year contracts for a refuse transfer station and chemical waste treatment facility for award in December 1992. Apart from
the last two (which are fairly small) all have been introduced
to either the Airport Committee or the JLG. of these Hong Kong Electric is clearly the one with the most potential to disrupt
life in Hong Kong.
Most of these contracts involve mainland
Chinese business interests, and/or Hong Kong firms with close
China connexions. But their influence would almost certainly
not be enough to override the political directive which appears
to have gone out on this subject.
8. This latest Chinese blast has sent a shock wave through the
business community, in Hong Kong and here. A broker friend at
James Capel tells me that the selling over the last two days has come mainly from mainland Chinese interests, and private Hong
Kong shareholders. The institutions in Europe and the US are not (yet) selling, but are becoming uneasy. If they did decide to switch some of their holdings, eg to Japan, it would trigger
a collapse in the market.
9. We have also been receiving a series of anecdotal reports
that the Chinese are continuing to turn the screw on British Hong Kong business, and also spreading the net to include British businesses operating in China. This suggests that the
distinction Zhu drew between Hong Kong issues, and Sino-British trade, is breaking down. Examples:
con.frn.ADM
SLM
CONFIDENTIAL
Redacted under FOI exemptions 27(1), 40(2) and 41.
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