Issue

CONFIDENTIAL

-

Objective/explanation

Secretary for Monetary Affairs (Cont'd)

11

Present status/progress

China

interest

UK

interest

International

The IMF has offered to

Monetary Fund (IMF) conduct Article IV Article IV Consultations for Hong Kong

Asian Development Bank (ADB) Board of Governors Annual Meeting

consultations for Hong Kong which will involve IMF staff conducting a mission to Hong Kong on an annual basis to discuss with Hong Kong Government officials Hong Kong's exchange rate policy. If proceeded with, this will create a new working relationship which the IMF would want to continue after 1997. Thus the need to inform the Chinese side beforehand.

hosting of such a meeting in Hong Kong would give us the international prestige associated with hosting such an event, help to emphasize our autonomy in ADB and provide attendees

(members of governments, senior bankers) with an opportunity to see Hong Kong at first hand.

UKREP IMF Washington will approach PRCREP IMF Washington explaining the IMF initiative and

practical benefits to Hong Kong in having such consultations. UKREP JLG HK will approach his Chinese counterpart shortly thereafter.

SMA will first discuss with the Australian Executive Director in ADB when he visits Hong Kong in April and will raise it, still informally, with the ADB President at the Annual Meeting in May. Just in case the ADB approaches the Chinese Executive Director about the proposal, PA will speak to NCNA after SMA has spoken to the Australian Executive Director.

CONFIDENTIAL

X

X

X

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