CONFIDENTIAL
HKA 233/
209
050227
MDHIAN 9091
TOP COPY Q DIST?
CONFIDENTIAL
FM UKREP JLG HONG KONG
TO DESKBY 02113OZ FCO
TELNO 139
OF 02090OZ APRIL 92
INFO IMMEDIATE PEKING, HONG KONG
Pa
C
1.2/4
YOUR TELNO 270: HMOCS
1. I REGRET THAT, DESPITE THE DESKBY AND THE FACT THAT THE TELEGRAM WAS CORRECTLY ADDRESSED, I DID NOT RECEIVE YOUR TELNO 585 UNTIL THIS MORNING (2 APRIL).
196
2. ON THE QUESTION OF PHASED PAYMENTS, I AGREE WITH HONG KONG TELNO 905 AND PEKING TELNO 470 THAT THE PHASING OF PAYMENTS IS
UNLIKELY TO BE A STICKING POINT WITH THE CHINESE.
WE ARE
3. ON THE QUESTION OF FUNDING (YOUR TELNO 270) THERE IS NO MISUNDERSTANDING. WE ARE CLEAR THAT THE COMPENSATION/INCENTIVE
SCHEME WILL BE PAID FOR BY HMG AND I HAVE TOLD GUO THIS. EQUALLY CLEAR THAT THE FUNDING OF STERLING SAFEGUARDS IS IN CONTENTION. BUT YOU MUST DISTINGUISH BETWEEN THE SUBSTANCE OF YOUR NEGOTIATIONS WITH THE TREASURY AND WHAT IS SAID IN PUBLIC. ANY IMPLICATION, HOWEVER VAGUE, THAT PART OF THE FUNDING WOULD FALL TO THE HKG WOULD, AS PEKING RIGHTLY POINT OUT, AROUSE CHINESE CONCERNS AS PROTECTORS OF THE INTERESTS OF THE HKSARG. THIS WOULD NOT ONLY COMPLICATE FUTURE CONSULTATIONS WITH THE CHINESE OVER STERLING SAFEGUARDS, BUT WOULD ALSO ADVERSELY AFFECT THEIR CURRENT CONSIDERATION OF THE INCENTIVE/COMPENSATION SCHEME.
GALSWORTHY
YYYY
PAGE
1
CONFIDENTIAL