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5. ECONOMIC ISSUES
DAMAGE TO BRITISH COMMERCIAL INTERESTS
Senior Chinese leaders have said frequently and publicly that political and economic issues should be kept separate. (Eg in the context of renewal by the US of Most Favoured Nation status for China, and most recently in a statement by Ambassador Ma to a CBI Business Conference).
We have not been told formally by the Chinese side that they intend to discriminate against British firms.
Economic relations are mutually beneficial. We note that China at present enjoys an annual trading surplus of pounds 500 million with the UK.
Discrimination against British firms would not be consistent with the EC/China Cooperation Agreement, or the spirit of China's GATT application.,
A mistake to think that discrimination against UK commercial and economic interests would bring about change of policy on Hong Kong.
(If raised)
Aware of report concerning Shandong power project being cancelled. Seeking confirmation.
(Canton Metro: if raised)
Disappointed that British companies did not secure the rolling-stock contract. Still large number of contracts to be awarded in the project for which British companies are continuing to compete.
DAMAGE TO HONG KONG ECONOMY?
Essential for Hong Kong's economic success that is way of life and legal system are maintained after 1997 and supported by a Legislative Council that has been elected fairly and openly in Hong Kong.
Chinese officials have said many times that there is no connection between political and economic issues. Cannot believe China would want to damage well-being of Hong Kong people.
Investors rightly taking the long view. Economic fundamentals in Hong Kong excellent.
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