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MDHIA 2195
(B) THERE IS NO GOOD PRACTICAL REASON WE COULD GIVE IN PUBLIC FOR ONLY PUBLISHING FIGURES SINCE 1986. HOWEVER, WE COULD REASONABLY SAY THAT FIVE YEARS IS A SUFFICIENTLY LONG PERIOD TO ILLUSTRATE RECENT TRENDS. WE WOULD NOT BE KEEN ON PUBLISHING EARLIER FIGURES, WHICH WERE AFFECTED BY THE STRENGTH OF THE US DOLLAR AND BANK RESCUES IN 1983 AND 1985. BUT WE DOUBT IF THERE WILL BE STRONG PRESSURE FOR US TO GO FURTHER BACK.
4. DISCLOSURE OF FIGURES ON THE EXCHANGE FUND COULD CERTAINLY PUT PUBLIC PRESSURE ON THE CHINESE TO DISCLOSE THE SAR LAND FUND. IT MIGHT THEREFORE HELP THE SEPARATE DIALOGUE ON LAND FUND INVESTMENTS. BUT WE WOULD PREFER NOT TO COMPLICATE MATTERS BY REFERRING TO THIS ASPECT AT THIS STAGE.
5. ON THE ISSUE OF BANK NOTES BY BANK OF CHINA, WE SHALL LISTEN TO WHAT THE CHINESE HAVE TO SAY. WHILST WE AGREE THAT THERE IS NO FORMAL COMMITMENT TO ALLOW NOTE ISSUE BEFORE 1997, IT IS CLEAR THAT THE CHINESE HAVE INTERPRETED OUR SYMPATHETIC POSITION AS A POSITIVE RESPONSE. THIS DOES NOT SEEM UNREASONABLE. AND IF WE WERE TO SEEK TO CORRECT THIS IMPRESSION, DRAWING THE FINE DISTINCTION IN PARA 9 OF TUR, OUR GOOD RELATIONSHIP WITH THE CHINESE ON THIS FRONT MIGHT BE SERIOUSLY DAMAGED. IT HAS, IN ANY CASE, BEEN WIDELY ACCEPTED IN HONG KONG THAT THIS IS SOMETHING THAT WILL NATURALLY HAPPEN IN DUE COURSE. OUR AIM IS TO MAKE SURE THAT THE BANK OF CHINA APPRECIATES FULLY THE COSTS AND OBLIGATIONS INVOLVED.
6. THE RELEVANT PAPERS AND DRAFT SPEAKING NOTES WILL BE SENT TO YOU EARLY NEXT WEEK.
WILSON
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ΜΑΙΝ
23
HK CONFIDENTIAL FINANCIAL
(DIALOGUE)
LIMITED
HD/HKD
HD/ERD
DISTRIBUTION
31
HD/ECONOMIC ADVISERS
PS
PS/LORD CAITHNESS PS/PUS
SIR J COLES
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