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4. Agreement has been reached with the Chinese on the role
which the Hong Kong authorities would play in the Annual Meetings. ExCo formally approved the proposal in June 1993 and
the Finance Committee of the Legislative Council have accepted
the financial implications of up to HK$200 million. The next step is for a formal letter of invitation to be sent by the
Chinese to the IMF/IBRD, with HMG and the Hong Kong Government sending letters of support.
5. Before the invitations can be issued various procedural arrangements need to be agreed with the institutions. Most of these are straightforward and do not present any difficulty for
us or for Hong Kong. There have been two potentially tricky points. First, we have been keen to ensure that the
arrangements should give due recognition to the role that Hong
Kong and the SARG will play in hosting the Meetings, and that they are consistent with Hong Kong's autonomy. We are satisfied
that the arrangements now proposed provide adequate safeguards
in the political context. Second, we need to avoid any
contingent liabilities for HMG. The institutions asked both the
PRC and HMG for a guarantee of Hong Kong's financial contribution to the Meetings. The Chinese were willing to do
so, but such an arrangement was not acceptable to us as it was not consistent with Hong Kong's financial autonomy or HMG's policy of avoiding contingent liability for Hong Kong. The institutions have accepted our arguments and have dropped their request. Instead they will accept a formula whereby the
necessary assurances are given by Hong Kong in a letter which we
would convey to the IMF/IBRD. The Treasury expect to secure confirmation from their Ministers that this is acceptable to
them.
6.
Subject to that, the package of arrangements now proposed by the IMF/IBRD, satisfy all our main points of concern and are
acceptable to Hong Kong.
PF Ricketts
ibr.min.ADM
SLM
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