Х
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PRC to stipulate, as one extreme, that those rules and
regulations should be the enactments and regulations of the
Hong Kong Government prior to the acknowledgement of
Chinese sovereignty including the retention of an
independent currency and banking system.
19. Such an arrangement would appear little different,
for practical purposes, from the simple recognition
scenario at (i) though, psychologically, the appearance
of a closer and more formal relationship with Peking
might worry bankers more. If, however, Hong Kong were not
to retain its separate exchange rate regime (and particularly
free movement of capital) a significant part of the basis
for the establishment of a banking centre in the territory
would disappear.
20. A move to SAR status would make it less likely that
Hong Kong could remain a member of the ADB. At the very
least, since HMG would not presumably have any responsibility
for the territory's external relations, responsibility for
guaranteeing future loans and/or capital obligations would
fall to the PRC. If Hong Kong were to continue, as an
SAR, with a separate currency and exchange rate, this might
raise problems for China in relation to the IMF - although,
in such special circumstances, the arrangement might be
countenanced.
/C.
Liability
12.
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