TNAG-2815-FCO40-4061-Future-of-Hong-Kong-International-Rights-and-Obligations-(IR-1993 — Page 235

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MDHIAN 98.

(III)

THE FUND MISSION HAVE AN OFFICIAL RECORD OF THE FINANCIAL AUTHORITY AGREED BY LEGCO. THE

INSTITUTIONS APPARENTLY ALSO WANT SOME FORM OF ASSURANCE FROM THE UK (RELATING TO THE PERIOD UP TO JUNE 1997) AND FROM CHINA (FOR THE PERIOD AFTER JUNE 1997) THAT WE AND THEY (AS THE MEMBERS OF THE IMF AND WORLD BANK) STAND BEHIND THE FINANCIAL COMMITMENTS OF THE HONG KONG AUTHORITIES. (COMMENT: IT MAY BE THAT A STATEMENT OF THE CONSITITUIONAL POSITION WILL SUFFICE.)

THEY WOULD ALSO LIKE CLARIFICATION AS BETWEEN HONG KONG AND CHINA OF PRECISE RESPONSIBILITIES FOR ISSUING VISAS FOR THOSE ATTENDING THE MEETINGS.

4.

VAN HOUTVEN THEN LAUNCHED INTO A LONG MONOLOGUE ABOUT THE NEED, GIVEN CONCERNS ABOUT COSTS, AND 'RECENT DEVELOPMENTS IN LONDON'', TO GET INDICATIONS OF ''WIDESPREAD'' SUPPORT BEFORE PROCEEDING TO A FORMAL PROPOSAL. WHILE THAHANE HAD HAD A MESSAGE OF SUPPORT FROM THE US WORLD BANK CHAIR, ALBEIT TEMPERED WITH A CONCERN ABOUT COSTS, VAN HOUTVEN HAD AS YET HEARD NOTHING FROM THE US IMF DIRECTOR. (I HAVE FOLLOWED THIS UP: SEE PARA.8 BELOW.> ZHANG AND I SAID THAT OUR SOUNDINGS OF BOARD MEMBERS HAD INDICATED NO OPPOSITION, A GENERAL ACCEPTANCE THAT THE 1997 MEETINGS WILL BE IN HONG KONG, AND IN MANY CASES AN ACTIVE WISH TO PROMOTE HONG KONG. ZHANG AND I THEREFORE SAW NO NEED TO DELAY THE TIMETABLE, AND I ADDED THAT WITH MANY BOARD MEMBERS NOW EXPECTING A PROPOSAL BEFORE THE ANNUAL MEETINGS, I COULD SEE EVERY REASON FOR PRESSING AHEAD.

5.

VAN HOUTVEN THEN ADDED THAT HE WAS CONCERNED ABOUT CREATING A WRONG IMPRESSION IF WE WERE TO SEEK TO ACCELERATE NORMAL BOARD PROCEDURES OVER THE SUMMER. MANAGEMENT MIGHT BE ACCUSED OF TRYING TO ''BOUNCE THE TWO BOARDS. THE EARLIEST THAT HE AND THAHANE COULD VISIT HONG KONG, BEIJING, AND LONDON (THEY NOW FEEL THEY WOULD HAVE TO VISIT LONDON) WOULD BE THE FIRST/SECOND WEEK OF AUGUST. THE EARLIEST A BOARD PAPER COULD ISSUE WOULD BE AUGUST 15, IN THE MIDDLE OF THE BOARD RECESS, FOR A BOARD DISCUSSION AT THE BEGINNING OF SEPTEMBER. THIS WOULD LEAVE AN UNUSUALLY SHORT PERIOD (THREE WEEKS) FOR GOVERNORS TO VOTE BEFORE THE ANNUAL MEETINGS.

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