TNAG-1259-FCO40-1599-The-Future-of-Hong-Kong---special-study-by-FCO--August-1982--1983 — Page 119

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powers of the Fund.

Apart from this, however,

relationships with the Treasury or the Bank of England

(or with other central banks with which the Exchange Fund

holds deposits and securities) would not need any

different basis.

16. It is possible that a formal change in sovereignty

might create difficulties for Hong Kong's continued

membership of the ADB. (The PRC is not a member of the

ADB but Taiwan is). If there is a change in or ambiguity

over responsibility for external relations, responsibility

for the financial guarantees in paragraph 11 above would

be affected.

17.

Provided that agreement could be reached with China

on full ultimate administrative control by HMG over the

territory there should be no change in the existing

pattern of relationships with HMG reducing the

possible adverse effects on confidence in Hong Kong as an

international banking centre. Acceptance by HMG of less

than this would place the Government in an untenable position.

(ii) Hong Kong as a Special Administrative Region (SAR)

18. The features of Special Administrative Regions have

been only loosely defined, but provide that 'the rules and

regulations in force shall be stipulated by law according

to specific conditions'.

This would appear to allow the

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