SECRET

FM PEKING

TO IMMEDIATE FCO

TELNO 1037

OF 260901Z JULY 93

SECRET

TOP COPY Q DIST?

۳alb/i

INFO IMMEDIATE HONG KONG, UKREP JLG HONG KONG

71

72

78

104735

MDHIAN 0006

HUA 016/1

LAUG 1993

HONG KONG TELNO 1182 AND YOUR TELNO 688 TO HONG KONG: LOCALISATION

LENDING

1.

WE ARE GRATEFUL TO CIVIL SERVICE BRANCH FOR BENDING US A COPY-

IN GENERAL WE THINK OF THE DRAFT SPEAKING NOTE FOR USE WITH NCNA.

THIS IS WELL-DRAFTED FOR USE WITH THE CHINESE AUDIENCE.

2. HOWEVER WE ARE A LITTLE UNEASY ABOUT PARAS 27-32 ON THE LONGER-TERM, IE THE CHANGE OF GEAR FROM PROVIDING INFORMATION ABOUT WHAT IS ABOUT TO BE ANNOUNCED (IE ON TRANSFERS TO LOCAL AGREEMENT TERMS) TO SEEKING TO ENGAGE THE CHINESE IN DIALOGUE ABOUT FUTURE MEASURES (IE THE POSSIBILITY OF OFFERING LOCAL PENSIONABLE TERMS). THE CHINESE MAY BE SUSPICIOUS OF THIS, AND SUCH SUSPICION COULD MAKE THEM MORE DIFFICULT ABOUT THE IMMEDIATE DECISION THAN NECESSARY.

3. AS SEEN FROM HERE, IF HONG KONG AND YOU HAVE DECIDED THAT THE CHINESE MUST BE FULLY CONSULTED ON THE LATTER POINT, AS A MATTER BEARING ON SMOOTH TRANSITION ETC, THE RIGHT FORUM WOULD BE THE JLG. AT THIS STAGE HONG KONG MIGHT FLAG UP THAT THE QUESTION IS UNDER INTERNAL CONSIDERATION: AND SAY THAT WE SHALL RAISE IT IN THE JLG IN DUE COURSE BUT THAT IF NCNA WOULD LIKE TO CONTRIBUTE TO CSB'S PRESENT REFLECTIONS THEN CSB WOULD BE HAPPY TO DISCUSS IT WITH THEM.

4.

WE ALSO HAVE A COUPLE OF QUERIES OF DETAIL ON THE EARLIER PART OF THE DRAFT:

(A) PARA 10, LAST SENTENCE: HAVE WE ALREADY FORMALLY TOLD THE CHINESE FORMALLY THAT BY 1997 ALL THE POLICY SECRETARY POSTS WILL BE FILLED BY LOCAL OFFICERS ? IF NOT, IT DOES NOT SEEM NECESSARY TO GIVE AWAY THIS POINT NOW.

(B) PARA 23, LAST SENTENCE: GIVEN THE CHINESE OBSESSION ABOUT ''BURDENS'' IT MIGHT BE WORTH DEVELOPING THIS POINT ABOUT THE FINANCIAL IMPLICATIONS, MAKING CLEAR (IF THIS IS CORRECT) THAT THE CHANGE IS LIKELY TO SAVE HKG SOME MONEY AND AT WORST WILL BE

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