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ositive aspect of this problem is that as of writing the Hong Kong dollar is at 23 year low against the pound 1:14.9. The whole guestion
stering safeguards
HMGS Commitments towards IMOCs pension seperate sudinission.
of
subject consurting the Chinese
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s and
Whatever the scheme is decided upon, this is clearly an issue on which the Chinese could legitimately claim they should be properly consulted. They could also point to the precedent established by consultations over the limited compensation scheme, which was the subject of discussion at several Plenary meetings of the JLG. Against this background and our decision to step up the
level of consultation with the Chinese, it would not be advisable to think in terms of simply informing the Chinese or of merely going through the motions of consultations.
It is extremely difficult to predict how the Chinese will react to any proposals on this issue. Before June 1989, we had judged that the Chinese would be opposed to a traditional General Compensation Scheme, on the basis that it would, in 1997, denude the civil
service of many key personnel.
be different.
Now, however, their reaction could
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The Chinese may suspect that the modified compensation scheme
approved by Ministers in 1988 is yet another attempt by Britain to continue to exert her influence in Hong Kong after 1997, involving as it does payment of SARG officers by HMG for up to 9 years after 1997. The arguments in paragraphs 14 and 16 above might not cut
much ice.
I recommend that
In view of the uncertainty of any Chinese response, one possible we should
option would be to approach the Chinese now, possibly in the margins at JLG XVI, explaining the problem, setting out our preferred solution, while outlining some others and seeking their agreement to the preferred solution. This would be in keeping with our new policy of consulting the Chinese at an early stage.
But we wůld
have to make it clear that we would ultimately have to take the
decision which we considered best.
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