SECRET FM FCO

TO IMMEDIATE HONG KONG

TELNO 1155

OF 181445Z JUNE 90

SECRET

Ry 29/1

Ms Marssen Mr Stone

тебе

W 19,

/19/2

AND TO IMMEDIATE PEKING, UKREP JLG HONG KONG

047204

MDHOAN 0960

My Paul, Hoid

کہنا

We won't be able

Chwee

434b

all anks

W

have

Munira backing for

ow scheine You now in pre dane.

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1

PERSONAL FOR GOVERNOR FROM PAUL, HKD

GENERAL COMPENSATION SCHEME: CONSULTING THE CHINESE

1.

IN PARALLEL WITH OUR WORK ON THE DETAILS OF THE GENERAL COMPENSATION SCHEME (GCS) FOR HMOCS MEMBERS IN HONG KONG, WE HAVE BEEN GIVING FURTHER THOUGHT TO THE CHINESE ANGLE. YOU WILL RECALL THAT WHEN WE LAST CONSIDERED THIS QUESTION IN JANUARY (YOUR TELNO 306 AND PEKING TELNO 75) IT WAS AGREED THAT IT WOULD BE SENSIBLE TO WAIT UNTIL AFTER THE BASIC LAW WAS PROMULGATED BEFORE RAISING THE GCS WITH THE CHINESE. IT WAS ALSO AGREED THAT WE SHOULD MAKE OUR APPROACH THROUGH THE JLG, ALTHOUGH NOT NECESSARILY IN PLENARY SESSION.

2.

3.

AGAINST THIS BACKGROUND, WE BELIEVE THAT IT WOULD BE RIGHT TO TAKE RATHER MORE TIME OVER CLEARING THE CHINESE HURDLE THAN HAD BEEN ENVISAGED IN JANUARY. WE DO NOT THINK THAT IT WOULD BE ADVISABLE TO THINK IN TERMS OF SIMPLY INFORMING THE CHINESE OF OUR PLANS OR OF MERELY GOING THROUGH THE MOTIONS OF CONSULTATION.

4.

SINCE THE SCHEME WILL ENTAIL HMG MAKING PAYMENTS TO CIVIL SERVANTS OF THE SARG, THIS IS CLEARLY AN ISSUE ON WHICH THE CHINESE COULD LEGITIMATELY CLAIM THEY SHOULD BE PROPERLY CONSULTED. THEY COULD MOREOVER POINT TO THE PRECEDENT ESTABLISHED BY CONSULTATIONS OVER THE LIMITED COMPENSATION

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THE ORIGINAL HAS BEEN

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