in the discussions on the different subjects, will
themselves be different. Discussions on the Sterling
the
Agreements with Hong Kong must be linked to the time-
table for discussions with other signatories;
timing and urgency of any discussion on exchange rate
policy will be influenced by world monetary developments
But there is no timetable for discussion on the more
fundamental questions of financial structures; nor
indeed does there seem to be much awareness that these
are questions on which we might be able to be helpful.
The draft telegram to the Governor attached therefore
has as its objective the preparing of the ground for
a systematic dialogue on possible reforms of financial
structure and management.
6.
We agreed that Hong Kong is very short of people
both to plan and to carry out such reforms. They are
also suspicious of any suggested changes which have
not been a part of Hong Kong's success story in the
past, and, especially, when they are pressed on the
Hong Kong Government by HMG, who se financial performance
the Hong Kong Establishment affect to despise.
7.
We agreed that Hong Kong might need help from us
this autumn but that the offer would have to be made
with care. The Governor is coming on leave on 4
August. We should therefore take the chance to concert
take 26
and agree our offer with him in the course of discussie
which we would visualise as ranging widely over the
whole range of problk
with
The right moment for such
discussions would be when we are clearer on how the
Sterling Agreement question is to be handled in
relation to Hong Kong. It is possible that the
/discussion