TNAG-2418-FCO40-3520-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1992 — Page 155

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(g) to delay a decision on safeguards until much nearer

1997.

Each of these options is explained in more detail in Annex

Their political and financial consequences are

D.

considered below.

(a) Traditional Scheme

11. This is not a practical possibility. The Chinese Government, as sovereign after 1 July 1997 stand as proxies

for the successor government. The FCO believe that they would instantly reject any proposal to go beyond the Joint Declaration in this way. They would see it as undermining the Joint Declaration provisions for continuity in the public service. They would not be prepared to offer an exchange-rate guarantee to either local or expatriate

officers.

Comment: Departments agree that this option is not

feasible.

(b) Modified Traditional Scheme

G

12. This is what HMOCS members are seeking, but it would be very expensive and would probably ensure that almost all

HMOCS officers would leave. As most HMOCS officers would be

likely to take advantage of the scheme, the cost could

approach its maximum £150 million. It would also be hard

to reconcile with our commitments under the Joint

Declaration to work for Hong Kong's prosperity and stability and for a smooth transition in 1997. Local officers, who

have shown the same loyalty to the Crown, would react angrily to a scheme which led to an expatriate exodus in 1997, leaving them alone to face the change of sovereignty. It could be difficult to explain to Parliament why we were prepared to commit up to £150 million on a group of civil

NC3AAV/5

CONFIDENTIAL