TNAG-2779-FCO40-3998-Future-of-Hong-Kong-constitutional-development-Chinese-reac-1993 — Page 117

UNCLASSIFIED

4057

MDHIAN 9388

ADHERE TO THE MOU AND AS LONG AS THE PROJECT WAS CARRIED OUT ON THE BASIS OF COST-EFFECTIVENESS, THEY WOULD NOT ONLY SUPPORT THE CONSTRUCTION BUT WOULD SINCERELY HOPE THAT THE PROJECT COULD BE COMPLETED BY 1997.

5. COMMENTING ON REPORTS THAT WE WERE LOOKING INTO A THIRD FINANCIAL PACKAGE, THE ARTICLE SAID THAT IF THE NEW PACKAGE WAS ONLY A MODIFIED VERSION OF THE PREVIOUS TWO., WITHOUT CUTTING COSTS AND SOLVING THE CALLABLE EQUITY PROBLEM, THE CHINESE WOULD NOT ACCEPT IT. IF THE BRITISH SIDE WAS SINCERE, IT SHOULD NOT CONSIDER USING THE LAND FUND AND SHOULD TRY TO KEEP THE AMOUNT OF DEBTS UNDER DOLLARS 5 BILLION. THE COMMENTARY ALSO SAID THAT OUR STEP BY STEP APPROACH IN SETTING FUNDS FOR THE NEW AIRPORT WAS

AIMED AT CREATING A FAIT ACCOMPLI FOR THE SAR.

CHINESE SOURCES

6. WE ARE REPORTING SEPARATELY A STORY IN MING PAO TODAY (3 MAY)

WHICH QUOTED SOURCES TO REPORT REMARKS BY CHINESE OFFICIALS ON

THE PROSPECTS OF THE TALKS.

FORD

YYYY

MAIN

.HK POLICY

65

DISTRIBUTION

72

NTCD

HKD

PUSD

FED

LEGAL ADVISERS//MS BARRETT LEGAL ADVISERS//MISS BROOKS

LEGAL ADVISERS//MR GILES

NEWS D

PLANNERS

RAD

PS

PS/MR GOODLAD

SIR J COLES

MR HUM

ADDITIONAL

CAOFF//SIR R BRAITHWAITE (DIO)

CAOFF//MISS NEVILLE-JONES

CAOFF//MR SIBSON

NNUN

PAGE

PS NO 10.

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UNCLASSIFIED