TNAG-2732-FCO40-3938-Future-of-Hong-Kong-constitutional-development-1993 — Page 81

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British Commercial Interests

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13. Until recently, the Chinese side have concentrated on

mobilising senior British businessmen to put pressure on HMG

for a change of policy. This has been coupled with public

attacks on Jardines and private hints of more general

discrimination against British firms. So far, hard evidence

of contracts lost for what appear to be political reasons is fairly sparse and some major British firms have continued to win business. The Chinese could step up the pressure by spreading rumours of retaliation against British firms and/or

by arranging for British consortia to lose one or more high profile contracts (eg the Guangzhou Metro). In doing so, they would no doubt try to avoid giving us firm evidence of politically-motivated discrimination which could be used to

their disadvantage in a GATT or an MFN context. Blatant

discrimination would give us good grounds to argue within the

EC for China's entry into the GATT to be (further) delayed.

But EC partners would be unlikely to show solidarity to tough

action eg in the EC/China Joint Commission: most are competitors of ours in the China market.

Tailpiece: A Note on Timing

14. The Governor's public objective is to have the

electoral legislation passed before the LegCo summer recess

(21 July on present plans). This suggests that the

legislation will need to be introduced by mid-May at the very

latest. Our position is that there is no reason why

Sino-British talks and the LegCo debate should not proceed in

parallel, since we would recommend any understanding to LegCo

(unstated addition: and most in LegCo would be likely to welcome it with open arms). But if talks start, the Chinese will ensure that they continue beyond any deadline we try to

HongKongissuesahead/BRIEFS/NJH

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