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China set to control damage if talks fail

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CHINA is drawing up contingency plans to minimise damage to the Hong Kong economy if political talks with Britain collapse, according to sources.

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Conceding that the negotiations with Britain over the 1994/95 electoral arrangements could end without a deal, Chinese officials have begun seriously considering measures to maintain the economic vitality of the territory under a no-agreement scenario.

China has been looking at options on how to handle specific issues such as Container Terminal 9 and the airport projects.

One major principle is to try to confine any damage to British interests - not those of China or Hong Kong.

Chinese officials will also study ways to counter any moves by Britain which they think might damage Hong Kong's economy, the sources said.

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Senior mainland officials handling economic matters in the Hong Kong and Macau Affairs Office and the local branch of Xinhua (the New China News Agency) have been given the task of mapping out economic fallout plans.

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