CONFIDENTIAL
7. We do not need to give Mr Galsworthy defensive briefing for this meeting. The Chinese will want to go away and study what he has said before giving any substantive reaction. They may however say that this is a major matter straddling 1997, affecting the smooth transition in 1997 and that we should therefore consult about it rather than merely brief them on our decisions. Mr Galsworthy will resist such a · line.
8.
The Chinese are most unlikely on this occasion to raise again their former proposal for Hong Kong to set aside a sum from the fiscal reserves to meet future pensions' liabilities. However we intend to instruct Mr Galsworthy to make no substantive comment if they do but to say that he will report to the Hong Kong Government. If this happens we would consult you again before any substantive reply is given.
9. We want this briefing to take place quickly, so that the Chinese have a chance to digest it before our consultations in Hong Kong become public (ie before 26 March). I should be grateful therefore if you could let me have any comments or clearance, of the telegram as soon as possible. If you could do this by close of play on Thursday 12 March, it would enable Mr Galsworthy to take action this week.
10. Meanwhile, on the details of the compensation/incentive scheme, we are reflecting on the interesting points discussed at your meeting on 28 February, attended by Nigel Cox and Michael Stone, and will keep you closely informed of progress.
عليكم
PF Ricketts
Peter Richelty
Cc:
Mr Burns
Mr Kerby, ODA
Mr Fish, ODA
NJCAAY