香港
督府
GOVERNMENT HOUSE
HONG KONG
O
SECRET
5 November 1993
HKA 233/1
Deen Joun
1-AUY 1993
FMOCS
Many thanks for your letter of 4 November.
the
We agree generally with the way you propose to handle the paperwork on this issue for OPD (K). Our main problem, as you will know from our telno 774 of 1 May 1993, is that we have always felt that the original Cabinet Office paper did not set out position fairly from our point of view. In particular it did not explain that the proposed Sterling safeguard rate of HK$16: £1 was not only a compromise based on the worst historical exchange rate, it
it was also well below the rate of HK$12:£1 which HMOCS officers could legitimately expect by reference to past practice and precedent elsewhere.
Ideally, we would like this point registered somewhere in the Cabinet Office paper and we would be grateful if you could seek to achieve this within the time available for finalising and circulating the papers. We take your point, however, that to seek to expand the Foreign Secretary's covering minute include this or any other of our major points is likely to result in Treasury counter-arguments and a consequent ballooning of the paper.
We will, therefore restrict ourselves to a minor amendment to paragraph nine of the minute. We believe that it would be fair to use the words "i.e. in the most unlikely event of the Hong Kong Dollar becoming worthless and despite all the assurances in the Joint Declaration". This is a factual statement reflecting HMG's publicly-stated confidence in the future of Hong Kong and one which demonstrates that we are only talking about a very remote potential contingent liability.
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