TNAG-2103-FCO40-2995-Future-of-Hong-Kong-exchanges-with-the-Chinese-on-the-Basic--1990 — Page 51

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FM HONG KONG

TO DESKBY 02130OZ FCO

TELNO 796

OF 021145Z MARCH 90

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RECEN

TOP COPY Q-DIST?

EGISTRY

12 MAR 1990

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CISTRY

INFO PRIORITY PEKING, UKREP JLG HONG KONGen

54

020651 MDHIAN 9343

MIPT: BASIC LAW: REVISED SPEAKING NOTE FOR ART. 106

BEGINS

1. THE BRITISH SIDE UNDERSTAND THAT NO CHANGE HAS BEEN PROPOSED AT BLDC IX TO ARTICLE 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.

2. BELIEVE THAT OUR VIEWS ON ARTICLE 106 ARE WELL KNOWN TO THE CHINESE SIDE. WE HAVE CONSIDERED VERY CAREFULLY THE POINT MADE BY MR LU PING TO THE GOVERNOR OF HONG KONG DURING THE LATTER'S VISIT TO PEKING IN JANUARY 1990, BUT THE PROBLEM IS ONE WHERE WE SEE A CLEAR LEGAL FETTER ON THE POWER OF THE SAR LEGISLATURE. WE HAVE SOUGHT TO AVOID THIS IN THE TEXT WHICH WE HAVE PROPOSED TO THE CHINESE SIDE (COPY ATTACHED).

iv Eg

translatio.

3. WE ALSO NOTE THAT THE PRESENT CHINESE TEXT OF ART. 106 CAN BE OPEN TO A BROADER INTERPRETATION: I.E. ''STRIVING TO AVOID DEFICITS AND STRIVING TO ENSURE THE BUDGET IS COMMENSURATE WITH GDP GROWTH. HOPE THAT THE CHINESE WOULD ALSO GIVE CAREFUL

CONSIDERATION TO THE ACCURACY OF THE TRANSLATION WHEN TAKING A FINAL VIEW ON THE TEXT OF ART. 106. But

ENDS

WILSON

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