TNAG-1899-FCO40-2697-Future-of-Hong-Kong-briefing-1989 — Page 213

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and that any improvements will not be at the expense of

third countries.

China Indemnity Fund

5. An Exchange of Notes between Britain and China in

1930, and the China Indemnity Act of 1931, provided for the British share of the China Indemnity of 1901 to be

used in annual payments for the mutual benefit of the UK

and China. The Act held that a Commission should be set

up in London which would use these payments for investment in railway materials and other projects in China. The Hong Kong and Shanghai Bank acknowledge that

they hold a sum in excess of £1 million, paid to the Bank

before 1950 by the Chinese Government Purchasing

Commission established under the Act. But the Bank is

showing reluctance to pay out the fund in view of the great losses they suffered as result of the Communist

takeover in China after the war.

Travel Notification Scheme

6. The Chinese Embassy (notably Madame Zhang Youyun, Counsellor) have complained that the TNS inconvenient and restrictive (notice has to be given 48 hours in advance). But there are restrictions on UK diplomats in Peking, eg limits on the distance outside Peking, UK staff are

allowed to travel.

Civil Service Cooperation

7. The Chinese are attempting to reform their civil

service and are keen to learn from the UK. The Chinese Minsiter of Personnel, Zhao Dongwan, wishes to combine a

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