CONFIDENTIAL
Hong Kong economy as a whole - are very real. The sums of money to be borrowed are very large and the banks have made it clear that a clear confirmation of Chinese approval will be required before it makes sense to go ahead.
9. We are clarifying with Hong Kong the kinds of assurances required. At the moment we want them tied firmly to the airport MOU so that no precedents are set for the non-airport matters (where we should prefer to avoid asking the Chinese publicly to speak on the SARG's behalf). I cannot exclude
the possibility however that the Chinese will try to exploit this situation in order to extract more political assurances from a new British Government. We shall have to be alert for this.
10. Our best tactic is to impress upon the Chinese that the deadlines are real and that there is no scope for horse-trading on the financial details. The bottom line is that if the Chinese choose to mess us about then it is they not we who will have to clear up the mess in 1997. I have set out in my separate minute some thoughts about how to manage the Chinese without falling into the trap of implying that we are the demandeurs.
It is
11. The HKG has a lot on its plate at the moment. doing remarkably well. Spirits seem high. There are impressive Chinese officials in the middle responding well to the challenges and pressures on them from all sides. The Financial Secretary is particularly exposed and having to sell his policies as never before to an excitable press and politically-charged LegCo.
12. Everyone impressed on us the need to avoid complicating the business of clearing the airport finances with China by any other controversies over the next two months. But in Hong Kong the political environment is getting very difficult as politicians jockey for position by running against the government. Calm deliberation is becoming impossible in a society where so much information leaks so quickly to the press. This makes it difficult for the government to clear its lines with ExCo, LegCo, the Chinese, professional advisers etc, since details at once get out and antangonise the others. Handling ExCo and LegCo and giving sound advice for the 1995 elections is going to be the number one headache for the new Governor. Interest in the choice is intense and whoever is chosen will need to be extrordinarily resilient physically and emotionally.
It
13. We need to keep up our contacts with the Hong Kong Government to ensure that we are not taken by surprise. will be equally important to build up HKG/British contacts with the Chinese over the next five years: there are successful examples already (? CFD); we need to find ways of
EM8AAK
CONFIDENTIAL
No comments yet.
Private notes are available after approval.