CONFIDENTIAL
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MDHOAN 79
Looks more like an international agreement than an MOU. Although preparatory work (eg constructing offices) will need to be done. by the HKG, most of the substance will concern the SARG rather than the HKG. Unfortunately the HKG cannot bind the future HKSARG and the HKSARG will not come into existence before 1 July 1997. It is undesirable to associate the PRC with the Memorandum, not least because it further encourages the Chinese to argue that the PRC stands in the place of the as yet unborn HKSAR. If however the Bank/IMF insist on assurances from the Chinese on the SARG honouring the MOU, and on other matters such as privileges and immunities, we might suggest that they approach the Chinese direct to obtain this confirmation, orally or in the form of a letter.
5. On visas, we accept the point made in Hong Kong telno 1430 that the Chinese authorities will not accept that HKG can commit the future SARG. But equally we do not wish to concede the principle, which goes much wider than the present case, that the Chinese Government can speak for the future SARG. We therefore suggest informing the Bank/IMF that we have yet to discuss with the Chinese the practical arrangements for the issue of Hong Kong visas after 1997, and that this is a
this is a technical matter on which we can revert to them at a later stage.
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