TNAG-2515-FCO40-3669-Future-of-Hong-Kong-International-Rights-and-Obligations-Sub-1992 — Page 47

CODE 18-77

Mr Morris

031/9 ལྷ་ ད.

Confidential

Reference

49

1.

2.

Attached is a draft telegram to Hong Kong.

The background is that the World Bank has a rule that the Bank will not borrow from a borrower of the Bank. They are inclined to treat Hong Kong and China as one entity after 1997 for the purpose of applying this rule. Hong Kong wrote to the Bank in August pointing out the autonomy the SAR will enjoy after 1997, and suggesting that the Bank treat Hong Kong as a special case under its borrowing policy. The Bank has not yet replied, but a recent discussion with the Bank official concerned revealed that they had decided not to make an exception to the policy on the grounds that other borrowers would press for similar treatment.

3

Hong Kong want UKDEL IMF/IBRD to make the case again to the IBRD management and they have asked for our views (telegram attached). I have spoken to IFID, ODA who are content. They in turn have spoken to UKDEL who is keen to pursue this using the points put forward by Hong Kong. They suggested to ODA that it would be helpful if we told them to proceed.

4.

I propose to issue the attached telegram.

un what

NC G Whitney

Hong Kong Department

WH 304 270 2651

30 October 1992

mor.min.ADM

SLM