TNAG-2749-FCO40-3964-Economic-situation-in-Hong-Kong-1993 — Page 29

5 Turning to the Chinese domestic situation Mrs Chan said it was

difficult to know what is really happening, who is in charge and who will succeed Deng. Only Zhu Rongji was putting his neck on the block, but perhaps he had made the calculation that he had little

to lose if he failed in his economic management and much to gain if

he succeeded.

6 On the economy Mrs Chan thought there were signs that Zhu might

be easing his controls too early. At the provincial level they did

not seem to have been taken seriously in the first place. She had

the impression that other leaders were jealous of Zhu, who tended

to be abrasive and was less conscious of face. Zhu had recently aligned himself with Qiao Shi. Perhaps, she thought, the

leadership would feel more relaxed when Deng died.

7 The Governor referred to the deep Chinese suspicion of UK and

Hong Kong government motives and asked the reason for this.

Mrs Chan thought that from a historical standpoint the suspicion if

not rational was at least understandable. The Chinese had a love-hate relationship with the west, particularly amongst the older generation. Such suspicion was fuelled to some extent by

Hong Kong Chinese businessmen seeking favours from the Chinese by

telling them what they think they want to hear about the British.

In addition Tiananmen Square was a watershed in the relationship:

since then China has seen Hong Kong, and certain individuals such

as Martin Lee and Szeto Wah, as a base for subversion. At the same

time the leadership were nervous about the weakening of China's

traditional controls, helped by the spread of communication media

such as satellite TV. Finally, the leadership were vulnerable to

social unrest: growing prosperity was far from evenly spread and there was nervousness about disaffecting the 80% of the population

in the rural areas.

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