TNAG-2471-FCO40-3595-Confidential-talks-between-the-UK-and-China-regarding-financ-1992 — Page 119

<<<<

Classification

SECRET

i

CUT

ELEGRAM (CONT)

Precedance

IMMEDIATE

ら。

this however, we are content in principle with the proposal that

the Financial Secretary should announce in due course the

Government's intention to provide greater transparency regarding

the Exchange Fund: that the office of the Exchange Fund should

then publish a summary of the fund's year-end accounts from 1986

to 1990: and that there would then be annual publication of the

figures six months in arrears. We agree that a time-lag of

about six months is desirable to reduce the risk of the figures

10 causing difficulties with the markets, eg if they show a large

decline in the reserves. Would you make clear in the initial

announcement that the figures would be published at a certain

time each year (presumably July?) so that a routine announcement

will be expected? We would like to be consulted again before

any decision to publish the figures more frequently or with less

of a time-lag.

4.

We therefore also agree that you should consult the Chinese on this proposal at the next meeting in the confidential

financial dialogue. We hope that they will respond swiftly and positively. Despite Lu Ping's encouraging remarks to the

Financial Secretary, we agree with Peking telno 71 that it will

be important to explain persuasively to them the reasons for

making the change. We think that you should put the emphasis on

the financial and monetary arguments, backed up by the IMF, and

not labour the arguments about public accountability which

figure in the memorandum for the Exchange Fund Advisory

Committee. The Chinese could be expected to react sharply to a

proposal which seemed to be aimed at reducing the powers of the

Executive in favour of eg Leg Co, and to wonder whether our main

LegCo,

consideration was lack of trust that the SARG's Financial

Secretary would act with the same probity as successive

13

Financial Secretaries have done since 1945.

34

for distribution order sex Pite

Caterweral

Printed in the UK for HMSO 6/89 DdFCC1077 C1000 27081

YF87/C037C