TNAG-2103-FCO40-2995-Future-of-Hong-Kong-exchanges-with-the-Chinese-on-the-Basic--1990 — Page 111

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FM HONG KONG

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TELNO 711

CONFIDENTIAL

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OF 26020OZ FEBRUARY 90

INFO PRIORITY PEKING, UKREP JLG HONG KONG

000445

MDLIAN 1373

33

YOUR TELNO 428 AND OUR TELNOS 646 AND 657: BASIC LAW: FURTHER

ACTION: ART. 106

IT MAY BE HELPFUL FOR PEKING, IN APPROACHING THE CHINESE ON ARTICLE 106, TO BE EQUIPPED WITH A SHORT SPEAKING NOTE. A DRAFT IS GIVEN BELOW. A CHINESE TRANSLATION WILL BE FAXED TO PEKING WHEN THE TEXT IS FINALISED. GRATEFUL FOR YOUR COMMENTS.

SPEAKING NOTE BEGINS

2.

THE BRITISH SIDE UNDERSTAND THAT NO CHANGE HAS BEEN PROPOSED AT BLDC IX TO ART. 106 OF THE FEBRUARY 1989 DRAFT. WE ALSO UNDERSTAND FROM PRESS REPORTS THAT THE BLDC SPECIAL GROUP ON THE ECONOMY WERE OF THE VIEW THAT THIS ARTICLE ONLY PROVIDED FOR THE PRINCIPLES TO BE FOLLOWED IN BUDGETARY POLICY AND WAS SUFFICIENTLY FLEXIBLE.

3

BELIEVE THAT OUR VIEWS ON ART. 106 ARE WELL KNOWN TO THE CHINESE SIDE. DURING THE VISIT OF THE GOVERNOR OF HONG KONG TO PEKING IN JANUARY, MR LU PING REFERRED TO A REVISED ENGLISH VERSION OF ART. 106. GLAD THAT THE CHINESE SIDE TOO HAVE SEEN THE PROBLEM IN TRANSLATION. HOWEVER, AFTER A CAREFUL EXAMINATION OF THE REVISED TEXT AS RELAYED BY MR LU, WE ARE OF THE VIEW THAT IT STILL DOES NOT ACCURATELY REFLECT THE CHINESE TEXT, WHICH IS OPEN TO A BROADER INTERPRETATION: I.E. ''STRIVING TO ACHIEVE A FISCAL BALANCE, STRIVING TO AVOID DEFICITS AND STRIVING TO ENSURE THE BUDGET IS COMMENSURATE WITH GDP GROWTH''.

4.

TRUST THE CHINESE SIDE WILL GIVE CAREFUL CONSIDERATION TO THE ACCURACY OF THE TRANSLATION OF THIS ARTICLE. COULD LEAVE A COPY OF THIS SPEAKING NOTE AND WOULD BE PREPARED TO DISCUSS THE TRANSLATION FURTHER IF NECESSARY.

SPEAKING NOTE ENDS

WILSON

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