TNAG-0379-FCO40-425-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 103

Mr Stewart (HKIOD)

COVERING SECRET

Aqued by

HONG KONG'S FINANCIAL PROBLEMS

A.. Hoar

his departure

In Now before his

before

المعلم سمسه

PA.

24

We have redrafted somewhat the draft submission and telegram copied to us under cover of Mr Goodfellow's minute of 17 July. The new drafts are self-explanatory, but as you will see, they do attempt to suggest that the three sets of problems which were isolated in the meeting we had with Mr Royle on 16 July are probably best handled separately. Indeed some measure of separate handling is almost inevitable on grounds of timing. We agree with you that the best time for a group of experts to initiate discussions on financial management and structure will probably be the autumn. That in itself will be too late to initiate exchanges on the Sterling Agreements; and of course the timing of any exchange rate difficulties is wholly unpredictable. We do, however, visualise that it would be useful to go over the whole range of problems with the Governor when he is here; and hence think that a time early in his leave may be premature.

2.

Before a telegram is despatched to Hong Kong we must I think clear it with the Bank and the Treasury. I leave it to you to decide whether to do this before or after consulting Mr Royle.

3.

These comments have been discussed briefly with Peter Marshall; FRD agree.

19 July 1973

cc Mr Marshall

Miss Pestell

COVERING SECRET,

DAHUL

D G Holland