TNAG-2606-FCO40-3797-International-support-from-Japan-regarding-the-future-of-Hon-1992 — Page 21

CONFIDENTIAL

Mr Watanabe in advance of the speech. At the same time, he

brought him up to date on the airport project.

4.

Progress on the new airport for Hong Kong has been hampered

by the unwillingness of the Chinese to agree to the proposed financing arrangements. On 9 September the Chinese side of the airport committee made certain suggestions which we built on in

reverting to them on 16 September with a full set of proposals.

Our proposals would eliminate almost all of the "problems" the

Chinese had identified, but were conditional on the Chinese

agreeing that the Special Administrative Region Government's

share (as well as HKG's share) of the premia from land sold to the airport railway corporation should be invested in the

Airport project. There has been no official reaction as yet,

but the left wing press has been highly critical another

British trick.

-

5.

We have had no success in engaging the Japanese in the

establishment of separate agreements with Hong Kong on air

services and visa abolition, probably because of a combination

of MFA suspicion of Chinese intentions for 1997 and internal bureaucratic wrangling.

Hong Kong Department

7 October 1992.

CONFIDENTIAL

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