TNAG-0579-FCO40-712-Discussions-with-Sir-Murray-MacLehose--Governor-of-Hong-Kong-1976 — Page 155

CONFIDENTIAL

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might also point out the need for a new monetary mechanism.

3. An IBRD economic mission has recently begun a fact-finding survey of the Hong Kong economy. It is possible that the mission's report, which is expected in mid-1977, will touch on the question of the establishment of a CMI.

4. In view of what the Governor said on this matter only a

few months ago, it seems unlikely that the Hong Kong Government are prepared, at this time, to give reasoned consideration to

the establishment of a CMI on the strength of such arguments as we might be able to marshall. Instead, it seems preferable

that officials should discuss the matter further with the Bank

of England with a view to its being raised again with the Hong Kong Government, preferably in the light of any useful lever that the IBRD mission might provide.

LINE TO TAKE

5. It would not be advisable to raise the question of the

establishment of a CMI with the Governor and Mr Haddon-Cave on

this occasion. If, contrary to expectation, they should raise it, it would be better to say that we should prefer to do more work on it before expressing any considered views.

2 DECEMBER 1976

CONFIDENTIAL