TNAG-2472-FCO40-3599-Confidential-talks-between-the-UK-and-China-regarding-financ-1992 — Page 101

CONFIDENTIAL

- air traffic control?

- working of Airport Committee and Consultative Committee

2. To discuss latest HKG thinking on investors' concerns about validity of contracts and franchises spanning 1997 in light of:

3.

(a) recent Eximbank visit to Hong Kong

(b) CLP scheme of control agreement and any investor

approaches to Chinese JLG office

(c) FCO reservations about asking Chinese for Airport

Committee Joint Communiqués

(d) Progress in JLG on IPPAS

To review the HKG/CPG confidential financial dialogue

and discuss the scope for inducing China to take a

(Scope for

more responsible and less interfering attitude towards Hong

Kong's economic and financial management and for putting the

onus on China to give the right public signals.

HKG providing advice to China on reform of its financial sector)?)

4.

To discuss current HKG thinking on privatisation of KCRC

and contracting out of services to private sector.

5.

To identify and discuss other economic or financial

issues which might prove a source of friction with the Chinese or cause difficulties for HM Treasury, eg;

HKG borrowing plans;

development of Exchange Fund office ("HK Monetary

Authority") ;

future of HSBC's "privileged position" if HSBC Holdings

mind and management move to London; and possibility of

Chinese stake in HSBC;

ASHAIN/2

CONFIDENTIAL