TNAG-1372-FCO40-1818-Ministerial-visits-from-the-UK-to-Hong-Kong-1985 — Page 249

CONFIDENT I AL

4.

The main

subject of

discussion at the

Hong Kong's

first

continued

meeting of the Group was

participation in the GATT. We proposed that Hong Kong should become a separate contracting party to the GATT

now and continue to be one after 1997. The Chinese

we re suspicious of this proposal, although they did

not reject it outright, and countered that Hong Kong

should continue to participate in the GATT after 1997

under a Chinese umbrella (once China has joined the

GATT) as it currently participates under a British

umbrella. We see serious problems in the Chinese

approach. We will raise this again at the second

meeting of the group in the hope of shifting the

Chinese.

5.

We also raised the question of

Hong Kong's

participation in

the Asian Development Bank. The

Chinese were more forthcoming on this and agreed that

China would take over the UK's guarantee of Hong

Kong's financial liabilities to the Bank in 1997, and that it had no objection to Hong Kong increasing these liabilities by participating in the forthcoming Third

General Capital Increase.

6.

We also raised with the Chinese the mammoth task of renegotiating Hong Kong's participation in hundreds

of multilateral

and

bilateral

agreements and

international organisations. We propose to create a legal sub-group to deal with this subject.

7.

the

concentrate

on

to

During the first half of its life we hope that

Group will

on Hong Kong's

international obligations, and only move

discussing transitional measures in the second half.

We need to adopt

to adopt a positive approach to the Group but at the s ame time to prevent any Chinese attempts to

interfere in the day to day administration of the

territory.

So far none have been

evident.

CONFIDENTIAL