TNAG-2815-FCO40-4061-Future-of-Hong-Kong-International-Rights-and-Obligations-(IR-1993 — Page 33

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FM UKDEL IMF/IBRD WASHINGTON

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AND TO DESKBY 02090OZ HM TREASURY, BANK OF ENGLAND AND TO IMMEDIATE HONG KONG, PEKING, UKREP JLG HONG KONG

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HM TREASURY FOR CUNLIFFE, BANK OF ENGLAND FOR BULLOCH, FCO FOR TEBBIT (ERD)

IMF/IBRD 1997 ANNUAL MEETINGS

HKC 031/10

1.DEL 1993

SUMMARY

1.

MEETING WITH ZHANG TO RESOLVE DIFFERENCES OVER DRAFTS. MOST DIFFICULTIES HAVE BEEN RESOLVED BUT WE ARE LEFT WITH THE CONCEPT OF CHINA DELEGATING TO THE SPECIAL ADMINISTRATIVE REGION THE AUTHORITY FOR IMPLEMENTING THE MEMORANDUM OF UNDERSTANDING. INSTRUCTIONS REQUESTED.

DETAIL

2.

ZHANG (CHINESE ALTERNATE AT BANK) HAS AT LAST RECEIVED INSTRUCTIONS FROM BEIJING ON THE DRAFT DOCUMENTS RELATING TO THE ANNUAL MEETINGS. CLEARLY HE HAS SPENT CONSIDERABLE TIME DISCUSSING MATTERS WITH THE MINISTRY OF FINANCE.

3.

THE OUTSTANDING ISSUE RELATES TO PARA. 7 OF THE MEMORANDUM OF UNDERSTANDING. ZHANG AGREED TO A TEXT ALONG THE LINES PROPOSED IN CHAN'S LETTER OF 12 NOVEMBER IN RESPECT OF THE RESPONSIBILITY OF THE UK. HE ACCEPTED THAT THE NOTION OF THE UK DELEGATING RESPONSIBILITY TO THE HONG KONG GOVERNMENT WAS INAPPROPRIATE. BUT HE WAS INSISTENT THAT THE CONCEPT OF THE DELEGATION WAS APPROPRIATE IN RESPECT OF RELATIONS BETWEEN CHINA AND THE SPECIAL ADMINISTRATIVE REGION FOR THE PERIOD FROM 1 JULY 1997. WE AGREED TO REFER THE FOLLOWING TEXT TO OUR RESPECTIVE AUTHORITIES FOR FURTHER CONSIDERATION. QUOTE 7. SERVICES AND FACILITIES FOR THE MEETINGS.

(A) THE ORGANISATIONS NOTE THE DECISION BY THE

GOVERNMENT OF THE UNITED KINGDOM THAT THE HONG KONG MONETARY AUTHORITY SHALL BE DELEGATED THE

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