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through an announcement in the March budget speech (the Chinese would be suspicious if they thought they were being bounced). If unexpectedly they express reservations, we shall need to consider our options more slowly.
11. We have considered whether publication of the Exchange Fund balance would in anyway limit Hong Kong's scope to draw on it to meet emergency pressure in other areas. (The Exchange Fund Ordinance provides that "the Financial Secretary may, from time to time, after consultation with the Exchange Fund Advisory Committee and with the approval of the Secretary of State, transfer from the Fund to the general revenue of the colony or to such other funds of the colony as may be authorised by the Secretary of State" part of the surplus of the Exchange Fund. However full acounts of all such other funds are published, so secrecy could not be maintained (even if the Exchange Fund Advisory Committee could be assumed to be leak-proof). Thus publication as proposed would have no adverse consequences
here.
12.
Publication as proposed also has no implications for our secret contingency plans regarding the Exchange Fund.
13. As a result of discussion of the Exchange Fund issue, we have been thinking further about the Land Fund, the operation of which could have significant monetary effects. This meeting could provide an opening to pursue the issue of its management in an unpolitical setting.
N J Cox
NC2ABD/5
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