CONFIDENTIAL
CONFIDENTIAL
FM PEKING
TO IMMEDIATE FCO
TELNO 2119
OF 190455Z DECEMBER 91
INFO IMMEDIATE HONG KONG
INFO ROUTINE UKREP JLG HONG KONG
Q LIST?
HKB 233/1
(231
(233
124670
MDHIAN 6843
HONG KONG TELNO 3872: HMOCS: PENSIONS
COMPENSATION/INCENTIVE SCHEME AND
1. I AGREE WITH THE ASSESSMENT IN PARA 6 OF TUR OF THE LIKELY CHINESE ATTITUDE TOWARDS ANY SCHEME WHICH INVOLVED THE HONG KONG GOVERNMENT PAYING SUBSTANTIAL SUMS TO HMG TO FUND THE PAYMENT OF PENSIONS TO RETIRED EXPATRIATE CIVIL SERVANTS.
2. I HAVE NOT SEEN (AND DO NOT NEED TO SEE) THE DETAILED RECORDS OF THE DISCUSSIONS WITH THE WHITEHALL TEAM AND DO NOT KNOW WHAT FIGURE WAS USED FOR THE CAPITALISED VALUE OF THE HMOCS PENSION LIABILITY. I ASSUME THAT A VERY LARGE SUM IS INVOLVED. BUT I HAVE NO DOUBT THAT THE CHINESE WOULD TAKE STRONG EXCEPTION TO ANY/ANY SCHEME OF THE KIND IN QUESTION, EVEN IF THE FIGURE WAS RELATIVELY MODEST.
3.
THE
THE CHINESE WOULD SEE THE QUESTION IN TERMS OF PRINCIPLE. JOINT DECLARATION CONTAINS A CLEAR PROVISION ABOUT THE CONTINUED PAYMENT OF PENSIONS TO RETIRED CIVIL SERVANTS IRRESPECTIVE OF THEIR NATIONALITY'. THE PROVISION IS REPEATED ALMOST VERBATIM IN THE BASIC LAW. THE DIRECTOR OF THE STATE COUNCIL HONG KONG AND MACAO OFFICE, LU PING, POINTED TO THE ASSURANCES CONTAINED IN THESE PROVISIONS WHEN HE MET REPRESENTATIVES OF FIVE CIVIL SERVICE UNIONS IN HONG KONG ON 12 MARCH THIS YEAR. ANY SUGGESTION THAT A TRANSFER OF FUNDS FROM THE HONG KONG GOVERNMENT TO HMG WOULD NONETHELESS BE NECESSARY TO ENSURE CONTINUED PAYMENT OF PENSIONS TO EXPATRIATES WOULD BE INTERPRETED AS AN INDICATION THAT THE BRITISH AND HONG KONG GOVERNMENTS (AS WELL AS THE EXPATRIATE CIVIL SERVANTS CONCERNED) HAD NO FAITH IN THE JD/BL PROVISIONS, OR IN THE INTENTION OF THE CHINESE GOVERNMENT TO HONOUR THEM AFTER 1997.
4.
THERE IS ALSO THE ASSET-STRIPPING ASPECT. THE LONG DRAWN OUT NEGOTIATIONS OVER THE NEW HONG KONG AIRPORT AMPLY DEMONSTRATED THE DEPTH OF CHINESE SUSPICION THAT THE BRITISH ARE OUT TO SYPHON OFF AS MUCH AS THEY CAN OF THE HONG KONG GOVERNMENT'S RESERVES BEFORE
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