XN000022-1991-07-04 — Page 5

THURSDAY, JULY 4, 1991

D.

The Chinese Government will adopt a positive attitude to necessary and reasonable borrowing by the Hong Kong Government to be repaid after 30 June 1997. If the total amount of debt to be repaid after 30 June 1997 will not exceed HK Dollars 5 billion, the Hong Kong Government will be free to borrow as necessary while informing the Chinese Government. If the total amount of such debt will exceed HK Dollars 5 billion such borrowing will only proceed if a common view has been reached concerning the proposal.

E.

On the basis of the above understanding the Hong Kong Government will plan its finances with the firm objective that the fiscal reserves on 30 June 1997 to be left for the use of the Hong Kong Special Administrative Region Government will not be less than HK Dollars 25 billion.

F. In order to facilitate the construction of the new airport in Hong Kong there will be established an Airport Authority and a Consultative Committee.

(i) The Airport Authority Ordinance will be modelled as far as possible on the Mass Transit Railway Corporation Ordinance. The Hong Kong Government will retain power to direct the Authority and responsibility for key areas of policy up to 30 June 1997. The Hong Kong Government will be willing to consider and take into account views of the Chinese side when the Hong Kong Government is drawing up the draft Bill on the Authority.

(ii) The Hong Kong Government is willing to appoint a Hong Kong based individual from the Bank of China Group to sit as a full member on the board of the Airport Authority. This member will have equal rights with the other members. The Chinese side will no doubt give the Hong Kong Government some suggestions as to who this member should be.

(iii) The Hong Kong Government will set up a Consultative Committee on the new airport and related projects. The Committee may discuss any relevant matter but will have no decision-making power. It should not delay the progress of the projects.

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