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Airport gap can be bridged


THE gap between Britain and China on the Government's contribution to the funding of the airport and its railway is now down to $10 billion. That is hardly a small amount but it is a divide that could be bridged given enough will and vision on both sides.

Will and vision have been in short supply. Now that the gap over how much should be injected has been narrowed, China is demanding revenue from the airport project land should be allocated to the Special Administrative Region Land Fund and, sensibly, that Provisional Airport Authority spending be more closely scrutinised.

On the British side at least, the mood is pessimistic. It is feared the Chinese side has no intention of reaching a deal on the airport until there is an agreement in the talks on the 1995 electoral arrangements.

But sentiment on the market tells a different story. The Hang Seng Index yesterday rose more than 180 points, partly on expectations of an airport agreement. Market reactions have to be treated with caution. There is often a bout of optimistic buying before talks which everyone apart from the market agrees are doomed to failure. But the market has been right before.

Good news on the airport would be another token of Chinese sincerity in not wanting to undermine the economy to score political points. However, with only one morning scheduled for this round of talks, it would be unwise to stake too much on an early agreement.