SECRET
CHANCELLOR
THE EXCHEQUER
OF
iii. Given the novelty of the scheme and the risks of quite sharp reactions, at least tem- porarily, it is most important that the Hong Kong Government should have thought through all the things that could go wrong, and have contingency plans ready for dealing with them. Good presentation at the outset will also be important..
iv. The obvious currency to provide the link required in the scheme is the US dollar, which is already for many purposes a second currency in the Colony. If the scheme were introduced with a sterling link it would have less chance of success since most Hong Kong residents would prefer to hold US dollars; and presentation would be more difficult. In the worst case it could also lead to wider pressures on sterling.
V.
On timing, although there is a case for going ahead as quickly as possible, the Governor is clear that he would need to consult his Executive Council on a matter of this kind. The authorities have a good deal more preparatory work and planning to do. And a weekend launch has considerable operational advantage. These factors all tend to point towards Friday 14 October, which is a public holiday in Hong Kong.
vi. The scheme is the only one being considered in Hong Kong, and therefore ready for early im- plementation. Although the final decision must be for the Hong Kong authorities, there seems a strong case for their going ahead. But it would be wrong for us to try to persuade them to go ahead against their own judgement, and could carry awkward implications about our own commitment to help if things went wrong.
The Governor, who appears to favour the scheme, will be calling on the Chancellor tomorrow, and the Chancellor plans not to dissuade him from going ahead with it.
I am copying this letter and enclosure to Brian Fall (FCO), and John Bartlett (Bank of England).
умнем, декого
JO KERR
No comments yet.
Private notes are available after approval.