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over the guarantee of outstanding liabilities, the callable capital, from 1997; and a continued contribution would be seen as confirming a more advanced status, with implications on the trade policy front.
10. Hong Kong believes, and we agree, that there is a slight balance of advantage in contributing. Arrangements would be made to ensure that the proposed amount would be fully disbursed before. 1997 so that there would be no contingent liability for the Chinese to inherit. However it would obviously be prudent to advise them, at the next regular meeting of the Joint Liaison Group which discusses
matters of common interest, what was intended.
11.
A new commitment of US $1 million would have a marginal effect on our overall liability in relation to the revised statutory limit. The total liability will be reducing on a regular basis as the existing loans which Hong Kong has had from the Bank are repaid. We therefore believe that Hong Kong could be allowed to take on this
new, relatively short-term obligation.
KG W Frost
International Financial Institutions Department
March 1986
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