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to be reassured that the Chinese have been briefed and have not threatened reprisals.
We therefore recommend that UKRep JLG should be instructed to take early action to
|the Chinese on other
(ie non-compensation) aspects of the arrangements for HMOCS officers before decisions were announced.
5. It was decided in 1992 not to tell the Chinese of the full package of arrangements to which HMOCS officers had traditionally been entitled, but just "one important point which we consider to be relevant in the Hong Kong context", viz compensation. nature of the compensation has of course changed since March 1992, but our briefing was sufficiently general to cover the new proposal (the phasing of payments presumably means that, as in traditional schemes, there is still an element of inducement to stay beyond 1997). On this then there is probably no need to go into detail but just to state that a new phase of consutations is about to begin and to confirm again in passing that it will be an entirely HMG-funded scheme.
6.
As for the sterling safeguard and early retirement, we have not, we believe, previously discussed these with the Chinese, although they may have followed press reports of HMOCS representations. It will be important to set the briefing in the same context as the initial briefing in March 1992 (although the Chinese are now more distrustful of our acting in accordance with our past practice in other dependent territories) and to seek to allay Chinese suspicions. They may be nervous about any implication that we do not have confidence in the strength of the Hong Kong dollar (we have seen in another context how anxious they are to avoid any apparent challenge to the US $7.8 peg); we explain that this is not the case, pointing out that the US$/sterling exchange rate has fluctuated markedly in recent years, that most HMOCS officers retire in the UK and that they are entitled to some safety net when they lose the Secretary of State's protection.
7. In the case of early retirement, we do not want the Chinese to argue that this constitutes privileged treatment for foreign nationals and (by drawing a fallacious link between JD78 and JD73) to raise doubts about whether the SAR will indeed pay the pensions
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