CONFIDENTIAL
FM PEKING
TO DESKBY 10103OZ DTI
TELNO INTRA 157
OF 100942Z DECEMBER 93
CONFIDENTIAL
INFO IMMEDIATE HONG KONG, BTC HONG KONG,
DTI FOR JONES, PEP3C
24
HUA.120/1
1993
27
145267
MDADAN 0334
In you's
timeful maten! is rebut complant from
SHANGHAI
ANGHAT
FCO
Mr Whitness
Ms (Bauch 15
HUD 180/2
YOUR TELNO INTRA 136 AND BTC HONG KONG TELNO INTRA 1950ECNO99 TO ALL): MAJOR PROJECTS IN CHINA AND HONG KONG
SUMMARY
1. Too early to assess future effect of talks breakdown. Hard evidence of contracts lost because of Hong Kong elusive. Political factors, possibly including Hong Kong, influenced Canton Metro project: but the Chinese also wanted to give a good reward to Chancellor Kohl. The UK still winning major contracts. We shall be monitoring situation closely.
DETAIL
2.
HPA-yave-vai warning on 2 December (the day of the Governor's announcement that he would introduce partial legislation) that "economic relations" were bound to be affected. However this point was omitted from following day's Chinese press accounts.
3.
The project which must be foremost in our minds is the Canton Metro. We have reported extensively on the decision to award the major part of the project to the Germans. It is clear that the final decision was taken in Peking, not Canton, and one must assume that political factors (both negative for us and positive for the Germans) played their part, several Chinese sources having indicated that the UK bid was favoured technically. Our revised concessional finance offer matched that of the Germans, although it came late in the day. It was always expected that Kohl would be rewarded with contracts for his visit and for the earlier German decision not to sell submarines to Taiwan. The reciprocal invitations for Heads of State to visit were also of great value to the Chinese. Despite this loading of the dice, the UK still won the contracts for the Metro's catenary (Balfour Beatty) and ventilation equipment (GEC Hong Kong).
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