SECRET

the package of benefits.

Although the HMOCS package is a matter

for HMG, and not HKG, I consider that the Chinese should be briefed given that the nature of the compensation scheme has changed since we last briefed them, and as we now propose to provide officers with a sterling pension safeguard. Also, the Chinese have asked for no more surprises on Hong Kong civil service issues; and they could retaliate against the package by threatening not to honour HMOCS pensions after 1997. Hong Kong and Peking agree.

A 5. Hong Kong propose that the briefing should be in general

terms and that it should impress upon the Chinese that this is a matter for HMG in honouring its obligations to HMOCS officers consistent with arrangements made in the past.

They have

B provided a draft speaking note and propose that UKREP JLG should

deliver the briefing later this week.

6.

We are content with the speaking note subject to minor amendment as proposed in the draft telegram.

NC G Whitney

brf.min.ADM

SECRET

SLM

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