TNAG-2783-FCO40-4002-UK-business-interests-in-Hong-Kong-Chinese-discrimination-ag-1993 — Page 62

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13 APR 1993

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DATE 7 Aptil 1993

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Mr. Mahis

Mr Bank

Mr Ricketts, HKD

HONG KONG: LARRY YUNG

1. Earlier today I attended a meeting of the Council of the China-Britain Trade Group to brief them on Hong Kong. My briefing gave rise to a number of questions, which betrayed some concerns but no particular hostility.

2. Nothing which was said cast any further light on the question of whether China is actively discriminating against British traders in China, as opposed to vaguely threatening to do

So.

3. The only contribution that needs to be recorded came from Michael Miles of Swires. He said he had just spent two days in discussions with Larry Yung, the son of Rong Yiren (head of CITIC until he was elected Vice-President by the National Peoples' Congress). Yung had spent Chinese New Year in Peking, and this had included meeting Deng Xiaoping. (Yung had a photograph of himself with a very doddery Deng to prove it.) Miles had drawn three conclusions from discussions with Yung:

i) Yung had said insistently that China did want talks with

Britain over the Governor's constitutional proposals, and that there would be some room for manoeuvre if only negotiations could get underway;

ii) But the Chinese were convinced that the Governor's proposals were not consistent with the Basic Law: in their view it was not a sound argument to say that some proposals put foward by the Governor were at a greater level of detail than contained in the Basic Law, and because the law did not cover them therefore there could be no objection to them;

iii) There was a genuine fear that our motivation in insisting

on the Governor's proposals was to bequeath to China a Hong Kong which was effectively independent and out of China's control.

Cotten

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