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(c) whether to make a bid for discussion in Cabinet Committee before Mr Patten leaves for Hong Kong. (There is

a meeting of OD(K) called for 7 July. I understand the agenda is Gilbrater. But we could put in a bid for HMOCS if

the Secretary of State agreed.)

Substance

3.

Before addressing specific points, it would be useful to

have a Ministerial steer on the relative priority of the Government's different objectives in making arrangements for

HMOCS:

(a) fulfilling a long-standing obligation of successive

Governments;

(b) avoiding a political storm about any apparent reneging

on such a commitment;

(c) inducing HMOCS members to stay in Hong Kong at least

until 30 June 1997, and maintaining their morale, loyalty

and sense of commitment until that date;

(d) inducing HMOCS members to stay for a shorter or longer

period after 30 June 1997, with good morale and sense of

commitment, in order to contribute to a smooth transition;

(e) winning Chinese goodwill and cooperation on other civil

service issues relevant to a smooth transition;

(f) minimizing the risk that the Chinese will renege on

their Joint Declaration commitments to the civil service;

(g) ensuring that HMG are in the best possible position to

respond if the Chinese do renege on the JD commitments, eg:

possibility of transferring funds from HKG to HMG to meet HMOCS pensions commitments if Chinese announce their

intentions before 1997;

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ability to draw clear lines between HMOCS and other civil servants, with HMG taking responsibility only for HMOCS;

(h) avoiding HMOCS arrangements' damaging morale etc among

local civil servants.

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