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HUB 012/6 нив
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FM BTC HONG KONG
TO IMMEDIATE FCO
TELNO 353
OF 180448Z DECEMBER 92
INFO IMMEDIATE DTI, ECGD, BANK OF ENGLAND
Mangle
Chiwa angle
175037
MDHIAN 2978 159
DTI FOR M/TRADE, OT2 AND PEP
BUSINESS IN HONG KONG: CHINESE PRESSURES
SUMMARY
1. AMIDST THE FLOOD OF RUMOURS AND CHINESE WHISPERS THERE IS LITTLE HARD EVIDENCE OF CHINESE ACTION AGAINST BRITISH INTERESTS IN HONG KONG AND SOUTHERN CHINA. SITUATION SUMMED UP BY TOP MERCHANT BANKER AS QUOTE THE PHONEY WAR UNQUOTE. SERIOUS IMPACT COULD DEVELOP IN 3-6 MONTHS TIME IF STAND-OFF CONTINUES. BUSINESS NERVES SURPRISINGLY GOOD, THOUGH PERSPECTIVES DIFFER ACCORDING TO MARKET SECTOR.
DETAIL
2. WE HAVE CONDUCTED AN INFORMAL SURVEY TO DETERMINE WHAT EVIDENCE CAN BE IDENTIFIED OF REAL ACTION AGAINST BRITISH INTERESTS IN HONG KONG BY THE CHINESE AUTHORITIES.
3.
THIS PLACE IS A VILLAGE WHICH HAS BEEN AWASH WITH RUMOUR FOR SEVERAL WEEKS. THE PICTURE WE GET, HOWEVER, IS OF A STRIKINGLY CONSISTENT LINE FROM CHINA - RELATIONS WITH BRITAIN GOOD, EXCELLENT PROGRESS IN DEVELOPING TRADE LINKS, GREAT PROSPECTS FOR FUTURE, WHAT A PITY ABOUT THE HONG KONG PROBLEM, MUST BE SOLVED (I.E. BY OTHERS) SOON. THIS IS SUMMED UP BY THE PHRASE QUOTE WE SHALL SEE UNQUOTE.
4.
THIS SAME MESSAGE IS INTERPRETED DIFFERENTLY. STRONG COMPANIES (ICI, GEC) VIEW IT AS A STATEMENT OF THE OBVIOUS AND ARE INCLINED TO DISREGARD IT. VULNERABLE COMPANIES (IN CONSTRUCTION) INTERPRET IT AS A THREAT.
5. THE GENERAL VIEW IS THAT CHINESE POLICY HAS YET TO TAKE SHAPE. WHAT WE ARE SEEING IS A HOLDING PATTERN. A LEADING MERCHANT BANKER EMERGING YESTERDAY FROM CORDIAL AND SUCCESSFUL TALKS WITH TOP OFFICIALS OF THE PEOPLE'S BANK TERMED IT QUOTE THE PHONEY WAR UNQUOTE. HE HAD PERSONALLY IDENTIFIED NO INSTANCE OF
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