measures to be taken in connection with the meetings such as privileges and immunities, safety and health measures, supplies, equipment of services, transportation services, accommodation and similar matters. Presumably the IMF and IBRD would wish the memorandum to be concluded before 1 July 1997. Unfortunately, the Hong Kong Government cannot bind the future HKSAR Government and the HKSAR Government will not come into existence before 1 July 1997. It would clearly be undesirable to associate the PRC with the Memorandum, not least because it encourages the Chinese to argue that the PRC stands in place of the as yet unborn HKSAR. One option would be to have two separate documents; one would be signed by the Hong Kong Government and the other would be signed by the HKSAR Government. The one signed by the Hong Kong Government would as far as possible contain matters to be implemented before 1 July 1997 and the memorandum to be signed by the HKSAR Government after 1 July 1997 would contain as far as possible matters which would have to be implemented after 1 July 1997. This is not very satisfactory, but it is difficult to see a better way round this problem.
5. I assume that the agreed contributions are towards costs of the meetings. I agree that the UK should not sign such a document. Incidentally, the memorandum you refer to in paragraph 2 of your minute to me is not about agreed contributions but only about practical arrangements (described in the previous paragraph). It is clearly undesirable for the UK Government to sign a Memorandum on agreed contributions since we would wish to avoid any possible contingent liability for the UK. Zhang has proposed that the UK and PRC Governments should endorse (but not guarantee) written assurances provided by the Hong Kong Government. One would need to explore what is meant by "endorse", but this too could carry a risk of contingent liability. On the other hand, if the Hong Kong Government were to sign it, a problem arises which is similar to the one identified in the previous paragraph with regard to the conclusion of the Memorandum on practical arrangements, assuming the contributions are to be made after 1 July 1997. In any case we should not undermine the autonomy of the Hong Kong Government (a bad precedent) (or after 1 July 1997 the HKSAR Government) in monetary and financial affairs.
6.
As to the letters of invitation, whatever is decided should be consistent with the autonomy of the Hong Kong Government and the HKSAR in monetary and financial matters. Of the three possible options outlined by Zhang in UKDel IMF/IBRD Washington telno 287, the first (the letter addressed from the Hong Kong Government to the UK authorities) is undesirable and sets a bad precedent for post 1997. The second option (passing the Hong Kong Government letter to the Bank and IMF via the UK authorities which is favoured by the Hong Kong Government) is acceptable, though it would be better if it were not annexed to the UK letter. The third option (joint signature of the letter) is also acceptable.
Shelagh
Brooks.
Shelagh Brooks
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