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deal with until we have a better idea which will be some time in emerging of what role overseas pensionable officers will play after 1997.

Finally, I should perhaps clarify one other point raised in your letter of 26 October. You suggest that those provisions of Section IV of Annex I of the agreement on the future of Hong Kong which refer to "privileged treatment for foreign nations" are a reference to the conditions of service of expatriate civil servants in Hong Kong. This is not the case. The first paragraph of Section IV stipulates that the pay, allowances, benefits and conditions of service of all civil servants, local and expatriate, shall be preserved after 1 July 1997 on terms no less favourable than before. The paragraph you quote, referring to "privileged treatment", deals with the system of management of the Public Service, and is an oblique reference to the membership of certain senior grades being reserved to British subjects only.

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