China row 'costs UK companies millions'

THE MAYOR of Canton has claimed that British companies lost million of pounds' worth of work on his city's new underground railway project because of the deteriorating Sino-British row over democratic reform in Hong Kong. UK companies have emerged with only about 10 per cent of the pounds 1bn project, but might have had 80 per cent, Li Ziliu said.

Mr Li's comments, on Friday, came just a day after the Chinese Foreign Ministry spokesman warned that the Hong Kong dispute would affect Sino-British relations, including economic and trade relations. Last Wednesday Chris Patten, the Hong Kong Governor, introduced a bill in the colony's parliament that would cover voting arrangements for the last elections before China takes over in 1997. As if relations were not bad enough, Peking and London are also at loggerheads over a BBC documentary, due to go out tomorrow, about Mao Tse-tung.

China's celebrations of 100th anniversary of the Great Helmsman's birthday on 26 December will focus on his contribution to nationalism and socialism, but the BBC Timewatch programme describes Mao's predilection for adolescent girls. China is trying to pressure the British government to stop the broadcast.

The Canton underground contracts were awarded before Sino-British talks on Hong Kong broke down. Germany was the biggest winner, and during the recent visit by Helmut Kohl, the Chancellor, its success was explicitly linked by the Chinese to Bonn's decision not to sell military hardware to Taiwan.

This left two main losers, France and Britain. The French government is being punished for its sale of military aircraft to Taipei.