CONFIDENTIAL

FM HONG KONG

TO IMMEDIATE FCO

TELNO 1105

OF 151200Z MARCH 88

INFO IMMEDIATE PEKING

37

TOP COPY

CONFIDENTIAL

Q DIST ?

012460

MDHIAN 2078

НКС 102

FORGIVED IN 3:

2/1

1JFIAR

V.

CK OFFICER

PA

YOUR TELNO MODEV 003 AND PEKING TELNO 494 : MULTILATERAL INVESTMENT GUARANTEE AGENCY (MIGA)

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IT IS UNCLEAR TO US WHAT ARE THE CONSIDERATIONS WHICH HAVE LED TO

THE PROPOSED CHANGE OF TACTIC WE HAVE ALREADY TOLD THE CHINESE THAT

IF THERE ARE UNFORESEEN DELAYS IN CONSIDERING HK'S PARTICIPATION UNDER THE GUIDELINES, THE UK WILL EXCLUDE HK FROM ITS RATIFICATION (PARA 3 OF SPEAKING NOTE (OUR TELNO 179 AS AMENDED BY YOUR TELNO

320) USED BY PEKING WITH THE CHINESE) IF WE NOW WISH TO INCLUDE HK

IN THE UK'S RATIFICATION WE WILL NEED TO EXPLAIN TO THE CHINESE THE

REASON FOR IT. OTHERWISE THEY MAY SUSPECT THAT WE ARE DOING THIS IN

ORDER TO EXERT PRESSURE ON THEM TO ACCEPT OUR PROPOSAL FOR THE CONVENTION TO CONTINUE TO APPLY TO THE HKSAR AFTER 1997. MOREOVER, WE WILL ALSO NEED TO BEAR IN MIND THAT SHOULD IT BECOME

NECESSARY FOR HONG KONG TO WITHDRAW FROM MIGA AT

A LATER STAGE DUE TO CHINESE OBJECTIONS, THIS WILL NOT BE EASY TO EXPLAIN PUBLICLY AND MIGHT AFFECT THE CONFIDENCE OF INVESTORS.

2. WE HAVE JUST SEEN SECOND TUR. WE SEE MERIT IN PEKING SIMPLY

REMINDING THE CHINESE THAT THE 40 DAYS ARE NEARLY UP AND THAT WE VERY

MUCH HOPE TO HAVE A POSITIVE ANSWER BY THEN SO HONG KONG CAN BE

INCLUDED IN UK'S RATIFICATION.

WILSON

YYYY

DISTRIBUTION

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ΜΑΙΝ

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HONG KONG AGREEMENT RESTRICTED

LIMITED

HKD

HD/FED

PS/LORD GLENARTHUR

PS/MR EGGAR

PS/PUS

MR MCLAREN

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