CONFIDENTIAL
1 April 1992
PRC Gray Esq Under Secretary HM Treasury
Dear Paul,
Visits to HK by Gor officials.
YOUR VISIT TO HONG KONG
1.
HKD 026/12.
(UNITS OF OFFICIALS TO
Foreign & Commonwealth
Office
London SW1A 2AH
HK)
Many thanks for your letter of 24 March to Andrew Burns about your forthcoming visit. We were grateful for the opportunity to put thoughts to you.
The
2. As background reading, I enclose: some extracts from our off-the-shelf Hong Kong background brief; a financial round-up on Hong Kong; and two papers prepared for the Chinese on the financial aspects of the Airport Project. first of these is an overview of the costs. The second (to be handed to the Chinese this week) is a full statement of the financial arrangements between HKG and the Airport Authority. We need Chinese agreement to this latter document, given that it creates post-1997 obligations.
3.
As I think you know, Andrew Burns and Simon Broadbent are in Hong Kong this week to discuss a range of current economic and financial issues, mainly related to the airport. Andrew Burns was particularly keen to do this before the election, so that he was fully up to speed for briefing new Ministers. This sort of exchange may become a regular event. We see this visit, and your own, as part of a continuing dialogue with the likes of the Financial Secretary and K Y Yeung. They both understand why HMG needs to take a close interest in economic and financial issues in Hong Kong, and indeed value our advice. I know that you will be conscious in discussions with them that Hong Kong has autonomy to conduct its own economic and financial affairs: and indeed given the prospect of 1997 it is very important that this autonomy should be maintained. As I say, we have found that it is perfectly possible to square that with close and continuing interest in the issues. HKG are well aware that HMG has legitimate interests of its own to protect.
4. As for specific points, you are well up-to-date on the HSBC/Midland affair. You will also have seen Oliver Page's report on his recent review of monetary arrangements and the Exchange Fund Office. You might like to pursue some of these points with the Financial Secretary and David Nendick. think you will find the financing of the Airport Project high on the list of priorities for most of your
I
MOPAFT
CONFIDENTIAL