TNAG-2679-FCO40-3876-British-Trade-Commission--Hong-Kong--and-China-Trade-Unit-re-1993 — Page 111

CS-AUG-1993 17:03

BRITISH TRADE COMMISSION

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Reference

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LONDON please pass

File Note

COMCEN

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cc: Allan Murzay, KAAA2d, DTI (Please pass to FCO)

HKD, FCO

FED, FCO

Allan Kerfoot, Peki

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EXPORT ADVISERS: MR STEWART JOHN

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to Bloddresses

) by fax in

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London.

many thanks

altey 36.

During my call on HAECO (Hong Kong Aircraft Engineering Co) on 29 July, I was received by Mr Keith Law the Deputy Director Engineering who subsequently showed me around their engineering operations. This was of course immensely impressive. There was one 747 stripped down to a skeletal state: there was a Tri-star in the final process of repainting and refurbishment. There was the last of Dragonair's B7378 about to be decommissioned before return to its leasing company; and there were more Rolls Royce engines in the engineering area than could be comfortably accommodated. (But, with BA's new 747 hangar in South Wales, HAECO has lost BA's custom at least pro tem).

2. I also met Mr Stewart John, the Deputy Chairman of HAECO. He is about to stand down and has been recruited as one of the DTI's export promoters. He will be taking up a full board membership of Rolls Royce Aeroengines and will be retaining his board position with AEL, the engineering group which supplies and supports a great deal of the equipment at Kai Tak Airport. I found him a man of unbounded enthusiasm. lucky to have him as an export promoter.

We are extraordinarily good contacts in the aviation engineering

He clearly has field throughout this region. conversation which Lu Ping had had with Cathay's Managing

He.pointed, for example, to a Director some months ago in which Lu Ping had referred to the twenty or twenty-five new airport projects across southern China which would be developed over the next ten years. John said that, with Cathay's and HAECO's connection with the

Mr Chinese aviation people, there was no reason why they could not piggyback British suppliers into what were undoubtedly huge opportunities. He and Mr Law briefed me on HARCO's current project in Xiamen. Here they have agreed a joint-venture engineering hangar for 747's with the controlling shareholding shared between Cathay and HAECO and the rest shared out between the Xiamen Municipality, JAL, SIA, and (as a last-minute entry) CAAC. CAAC's interest had been aroused when Mr John had pressed Hu Yizhou, former Director General of CAAC and now a Cathay board member, to consider joining the project. Hu had said nothing at the time, but, typically, on the eve of the signature ceremony in Xiamen, he had arrived to announce that CAAC wanted 10 percent (reduced to 9 percent in negotiations).

3. Both Law and John expressed great concern about the prospective move to Chek Lap Kok. With the high landing fees being demanded by the government to pay for the project, few airlines would wish to bring their aircraft there for

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