CONFIDENTIAL
YESTERDAY.
CHINA ALREADY HAD A CENTRAL BANK AND SETTING UP ANOTHER ONE
IN HONG KONG WOULD BE POINTLESS AS HONG KONG'S SOVEREIGNTY
WOULD REVERT TO CHINA, HE SAID.
SIR MICHAEL WAS SPEAKING TO REPORTERS ON THE ISLAND EASTERN
CORRIDOR WHILE TAKING PART IN THE WALK-FOR-MILLIONS.
ASKED IF NOW WAS AN APPROPRIATE TIME FOR HONG KONG TO CONSIDER
HAVING A CENTRAL BANK, SIR MICHAEL SAID HE DID NOT FAVOUR THE
IDEA. ''I DON'T REALLY SEE HOW A CENTRAL BANK IN HONG KONG
WOULD WORK'' HE SAID.
''AFTER 1997, HONG KONG WILL BE A SPECIAL ADMINISTRATIVE
REGION, A PART OF CHINA WHICH ALREADY HAS A CENTRAL BANK AND
YOU CAN'T HAVE TWO CENTRAL BANKS IN ONE PLACE'', SAID THE
OUTGOING CHAIRMAN.
THOUGH THE SINO-BRITISH JOINT DECLARATION DID NOT STIPULATE
THAT THE FUTURE SAR GOVERNMENT SHOULD SURRENDER ITS RIGHT OF REGULATING ITS MONETARY POLICY TO CHINA, SIR MICHAEL REPEATED
THAT ONE CENTRAL BANK IN ONE COUNTRY WOULD BE ENOUGH.
HE SAID HONG KONG WOULD ENJOY A HIGH DEGREE OF AUTONOMY AFTER
RETURNING TO CHINA, BUT IT WOULD STILL BE PART OF THE COUNTRY
AND WOULD NOT BE ENTIRELY AUTONOMOUS.
ASKED IF THE PEOPLE'S BANK, CHINA'S CENTRAL BANK, SHOULD RUN AN OFFICE HERE AFTER 1997 SERVING AS THE TERRITORY'S CENTRAL
BANK, SIR MICHAEL SAID: ** SHOULD BE VERY SURPRISED IF IT DOESN'T HAVE A BRANCH HERE THEN.''
BUT HE SAID HE HAD NO IDEA WHETHER OR WHEN CHINA'S CENTRAL
BANK WOULD START RUNNING AN OFFICE IN HONG KONG.
YOUDE
YYYY
(OCTOBER 6, 1986)
HMLNAN 3468
LIMITED HD / AKD
PS
PS/MR RENTON
PS/PUS MR GILLMORE DR WILSON
-2-
COPIES TO:
MR A. LOCHNIS? BANK OF
A.
MR P. KENT
ENGLAND
SIR P. MIDDLETON) H.M.
MR C. W. KELLY
CONFIDENTIAL
~}
S TREASURY