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6.
Handling the Chinese on this subject will be delicate,
and it will take a little time before we can agree a
speaking-note. Moreover the Treasury have asked us to clear
the note with them, which will be very difficult while they
do not accept our judgement of the likely Chinese approach.
There is thus a danger of losing the momentum we have
laboriously achieved. We need to pin down the progress we have made with the Treasury, and to minimise the risk of
Treasury back-sliding (eg after an election is called or in
the light of Hong Kong's announcement last week of its
healthy fiscal reserves). There is therefore much advantage
in the Minister's explaining the position in a confidential letter to Sir David Ford (Chief Secretary of Hong Kong),
leaving him discretion whether to brief reliable officers of
the Hong Kong HMOCS Association. The Treasury could not
complain about the "short, low-key statement" which we discussed taking this form, particularly if back-dated to 7 March before Lord Caithness left Hong Kong.
7.
On the details of our compensation/incentive scheme the
Treasury have not, after all, pressed on us any blocking
proposals for changes, but we need to show that we are
considering their ideas and will keep in close touch as we
prepare for consultations in Hong Kong. The draft minute
from the Secretary of State covers this point and, to
protect our position in future discussion, rebuts the Chief Secretary's ill-informed assertions on sterling safeguards.
The point which was not clear to us
L
Hong Kary last week was Had the Treasuryy are content for us to write to the Association' авал about compensation only (para 5 above). On his basis, I
Hat it is work getting Sametting in paper to fir David Ford.
agree
Perhaps we could discuss with the Minister
محمد
N J Cox
later
NJCAAP/4 As afternoon?
Pchetts
9/ü
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