CONFIDENTIAL
any problems of bank-note issue;
any major new infrastructure projects, eg sewerage
renewal;
possible LegCo blocking of Appropriations Bills;
arrangements for transfer of assets and liabilities to
SARG in 1997;
1
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6.
development of Tamar and other land questions (SARG Land
Fund)
possible HKG reactions to a new surge in inflation;
possible HKG contingency plans regarding link to US
dollar;
funding of Civil service pensions;
possible HKG reactions to a general economic and fiscal
down-turn (eg as a result of US non-renewal of MFN for
China; serious labour unrest; international recession;
interruption of economic development in Guangdong; new western sanctions against China/new COCOM restrictions on
high technology exports; a Chinese economic squeeze on Taiwan; China/GATT problems).
To pave way for a further round of discussion in London
before summer break and possible arrival of new Governor
(preceded by talks here with K Y Yeung in May).
7.
To contribute to improving morale of senior local civil servants by expressing appreciation of their careful approach to these issues and recognition of the pressures on
them from LegCo and the Hong Kong media as well as Peking
and London.
ASHAIN/3
CONFIDENTIAL