TNAG-1009-FCO40-1259-Appointments-of-senior-officials-in-Hong-Kong-and-Hong-Kong--1981 — Page 45

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I had a good general chat wit Pr. Bremminge

I will see him again informally

23 April.

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CONFIDENTIAL

CALL BY MR JOHN BREMRIDGE

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RROSTED IN REGISTRY NO. 51

1. Mr Bremridge came in this morning 13 APRIäbout his programme (copy attached) and for a general dispu

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f 13.4. a) Future of Hong Kong and major financial projects.

He is particularly concerned at the prospects for getting finance for the new airport if there is no more specific Chinese undertaking on the future of Hong Kong. He points out that the sum required could be as much as £3 billion and he doubts whether outside investors would be prepared to come up with it. He acknowledges, however, that this view is not shared by everybody.

b) Relations between the Bank of England and Hong Kong.

Mr Bremridge had just finished a 2-week visit to the Bank. He found them very helpful but rather concerned about their connection with Hong Kong. They are not entirely happy about the position of the Hongkong and Shanghai Bank. They accept that it can act as an effective central bank and that no more formal arrangement than that is required, but they also worry about the possibility of a financial crisis in Hong Kong in which they, the Bank of England, might be called on to step in to help. With this in mind they feel that they should have some measure of control or at any rate information about the Hongkong and Shanghai Bank. At present they do not even know its reserve situation. Mr Bremridge also thinks that the Bank of England would like to establish closer connections with the Hong Kong Government. They would probably like to get another official seconded to Hong Kong in addition to replacing Mr Allsopp who is at present on loan from the Bank of England as Deputy Secretary for Monetary Affairs. Mr Bremridge commented that part of the reason for the Bank of England's worry was that they not got on with the Secretary for Monetary Affairs, Mr Blye. He said that he personally was remaining totally non-committal on all the Bank of England's views. He recognised that there were serious issues affecting the economic independence of Hong Kong. Nevertheless, I think that he is likely to be more effective than Sir P Haddon-Cave at establishing a good working personal relationship with the Bank and this should be a hlep. So far as secondments were concerned, I suggested that Hong Kong might like to consider an exchange of financial officers which might be easier to sell in Hong Kong.

6 April 1981

12in

R D Clift

Hong Kong and General Department

CONFIDENTIAL

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