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CONFIDENTIAL
-4 NOV 270
(2
Mr Maud (FRD)
NEX
HONG KONG: MONITORING THE PLANNING PAPER
1XX013/548/3
1. We spoke last week about the action which is now under way in the Office for monitoring the Hong Kong Government's implementa- tion of the programmes of social and labour reform described in Annex C (paragraph 23) and Annex D of the Planning Paper on Hong Kong which was approved by the Secretary of State in late July.
2. I now attach copies of the following:
(1)
the Planning Paper, of which paragraphs 22-25 of the main part and paragraphs 7-9 and 23(ii) of Annex C are particularly relevant to Financial Relations Department. (The Planning Paper now has a "confidential" classifi- cation.);
(ii) the record of Lord Goronwy-Roberts' meeting with the
Governor of Hong Kong on 21 July (paragraphs 9-14 are relevant);
(iii) my submission of 9 September as a result of which
Lord Goronwy-Roberts agreed that a Standing Committee should be established within the Office to monitor the Hong Kong Government's implementation of the programmes set forth in the Planning Paper. The Committee is to meet quarterly under the Chairmanship of an Under- Secretary and to report to Lord Goronwy-Roberts;
(iv) the minutes of the first meeting of the Standing Committee
on 21 October.
3. The specific points in the Planning Paper which may be of interest to your Department are the recommendations in paragraph 23(ii) of Annex C to the Planning Paper.
These are:
(a) that sufficient funds should be provided for the
implementation of the programmes detailed elsewhere in the Planning Paper, preferably by a more progressive system of taxation, or by borrowing; and
(b) that there should be a further examination of the
relationship between the Hong Kong Government and the banks.
Both these recommendations are of a more long-term nature than most of the others in the Planning Paper. Mr Smith, Senior Economic Adviser, intends to have a preliminary discussion of them with Hong Kong Government officials during his current visit to Hong Kong.
4.
Apart from these particular recommendations, we will need to keep an eye on the Hong Kong Government's readiness to make
CONFIDENTIAL