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also need to be consulted.
It would be very difficult to
persuade them to accept such a large pay off in 1997 and it
would look like a clear indication of a lack of faith after
1997.
17. Mr Rew said it could be presented as relieving the
Chinese of an obligation at a favourable discount. Mr Fish
agreed that a figure of f(Sterling) 300 million against reserves of HK$71 bn was small. Mr Shipley reiterated that it was not the cost of the idea which was HKG's problem.
Mr Rayson repeated that the Treasury would still keep its
own idea on the table but if a solution was to emanate from
HKG this should be examined first. The discussion was
adjourned for consideration but not concluded; it was for HKG to decide whether they had any flexibility or movement with the proposal.
18.
Summing up Mr Paul said that the solution with the best
chance of running seemed to be this idea of HKG paying over
pensions to HMG before 1997. Mr Shipley undertook to
reflect further and to send a formal response after
consulting the Governor and the Hong Kong Chief Secretary.
19.
It was agreed that there would be no benefit in an
exchange between Treasury and FCO Ministers until officials
had fully explored the options.
JL6AAK/8
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