CONFIDENTIAL
Hong Kong to the substance in para 4 of the redraft Mr Mellor enclosed:
4.
"The Government have now formulated a proposal for a scheme providing elements of incentive and compensation. We look forward to opening consultations about this with representatives of the officers concerned before Easter."
However, both the Governor of Hong Kong and Mr Galsworthy strongly advised Lord Caithness that in view of the sharp Chinese reaction on a number of Hong Kong matters in recent weeks it would be better to have briefed the Chinese in general terms of what is intended before making the statement public. Otherwise if Lord Caithness' statement to the HMOCS Association received publicity in Hong Kong, it could lead to the Chinese reacting negatively on the basis of a mis-understanding of what was involved. For this reason Lord Caithness has so far made the statement only in the form of a letter to Sir David Ford, Chief Secretary of Hong Kong and the most senior HMOCS officer in the territory. He wishes Sir David Frod to use his own discretion as to whether to brief senior HMOCS officers on its contents, ie if he believes that this would be helpful and that they would respect the confidence until we were in a position to go public.
We
5. You mentioned to Michael Stone at your useful meeting on 6 March that you would like to see the lines of the briefing proposed for use with the Chinese. I now enclose the draft speaking note which we have prepared in consultation with Sir Robin McLaren, Mr Galsworthy and the Governor. envisage Mr Galsworthy using this with Ambassador Guo Fengmin, his Chinese opposite number in the Joint Liaison Group in Hong Kong. Drafting has not been easy, particularly while we want to keep open the option of an HKG involvement in any scheme to address the sterling safeguards problem. The Chinese are likely to be suspicious of what we propose, and we need to put the position in the way most likely to secure their acquiesence. Despite the continuing Whitehall disagreements about the extent of our obligations to HMOCS officers, we think it essential to describe the position in the terms we do: if we presented the scheme as purely a matter of incentives for people to stay on after 1997 we could expect the Chinese to see this as a British conspiracy to maintain influence over the Hong Kong administration after the change of sovereignty.
6.
We suggest that Mr Galsworthy should be given discretion to add a point orally about the timing of decisions (ie the June deadline) and about the loyalty of former HMOCS officers to the Government of the Special Administrative Region after 1 July 1997. I enclose a form of words.
NJCAAY
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