TNAG-2103-FCO40-2995-Future-of-Hong-Kong-exchanges-with-the-Chinese-on-the-Basic--1990 — Page 44

CONFIDENTIAL

041776

MDHIAN 029

(B) (IF THE CHINESE TEXT REMAINS UNCHANGED AND THE ENGLISH TEXT

STILL FAILS TO REFLECT FULLY OUR PREFERRED BROADER INTERPRETATION OF THE ARTICLE)

WE DO NOT FIND THE TEXT OF ARTICLE 106 ENTIRELY SATISFACTORY BECAUSE IT APPEARS TO FETTER THE SAR'S AUTONOMY IN FISCAL POLICY. WE HOPE THAT THE CHINESE WILL BE PREPARED TO LOOK AGAIN AT THIS ARTICLE AT SOME STAGE BEFORE 1997''.

3 I WOULD BE GRATEFUL IF YOU COULD RECONSIDER THIS APPROACH. IF YOU AGREE TO DEPLOY THE SPEAKING NOTE IN MY SECOND TUR, IT WOULD BE HELPFUL IF PEKING COULD TAKE UP ARTICLE 106 ALONG WITH ARTICLE 24(4) AND THE VALIDITY OF THE BL AS EARLY AS POSSIBLE.

WILSON

YYYY

DISTRIBUTION

60

ΜΑΙΝ

57

.HONG KONG AGREEMENT

. (RESTRICTED)

LIMITED

HKD

HD/FED

RESEARCH D (FE)

PUSD NEWS D

PS/MR MAUDE

PS/LORD BRABAZON

MR GILLMORE

MR MCLAREN

ADDITIONAL

3

MR WHOMERSLEY LEGAL ADVISERS

MS BARRETT LEGAL ADVISERS

MR FIFOOT LEGAL ADVISERS

NNNN

PAGE

2

CONFIDENTIAL