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proposes to earmark the minimum figure (£14-15 billion) and keep it with the other fiscal reserves deposited with the Exchange Fund. Sir David Wilson seems confident that this is a prudent figure by which Hong Kong can live.
But my telegram has underlined the Treasury concerns, which we share. And we have already asked Hong Kong to prepare a very clear account of how Hong Kong's reserves are structured in case the Secretary of State gets drawn into the discussions in Peking. I hope that, if the negotiations have to continue there, we can arrange for parallel negotiation led by representatives from Hong Kong.
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Anda. Ran
R A Burns