Peking resumes airport talks: Chinese adopt new tack on HK project

FOR the first time in more than seven months, Britain and China have agreed to talk about the most politically sensitive business decision in Hong Kong - how to finance the proposed Chek Lap Kok airport project.

It was announced yesterday that the Airport Committee of the Sino-British Joint Liaison Group will meet next Friday 'to continue discussions' on the financing arrangements. Formal talks were last held in October, just before Hong Kong's Governor, Chris Patten, unveiled proposals for democratic reform which caused fury in Peking.

News of the talks pushed Hong Kong share prices to yet another record, their third this week. The Hang Seng index of blue chips rose 97.52 points to 7,447.24 points.

That airport talks are going to take place was seen yesterday in Hong Kong as further evidence that China is adopting a 'business-as-usual' approach to non- political matters now that the two sides have started talks on arrangements for the 1984 and 1985 elections. The fourth round of Sino-British political talks will reconvene today in Peking and is expected to last two days.

Informal contacts over the past few weeks have resulted in new proposals for the airport financing package that try to meet China's concerns about high debt levels and the use of joint land-sale proceeds. Under the new proposals the Hong Kong government would provide a greater proportion of the funding than previously suggested.

Two months ago, at the National People's Congress, Chinese officials made explicit threats that economic and trade relations between Britain and China would suffer if the political deadlock continued. China now seems to have switched tactics and is treating political and economic matters separately.

Movement by China on economic matters comes after pressure from pro-Peking businessmen in Hong Kong, a section of Hong Kong society that Peking would not want to alienate. It does not appear to be linked with much progress in the political talks, which are moving steadily but very slowly.

Airport project financing from the Hong Kong government will run out at the end of June and the airport authorities are about to ask the Legislative Council for further funding. Work is proceeding on schedule but one large land reclamation contract has not been awarded while the overall financing was still up in the air.