TNAG-2892-FCO40-4165-Transfer-of-assets-from-the-Hong-Kong-Government-to-the-Spec-1993 — Page 27

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will then grant them to the SARG. The Chinese have stated in

the JLG that HKG's reserves should pass to Peking before being

granted to the SARG, and they have asked for a full list of

HKG's assets. They have, however, assured us that the PRC

would hand over to the SARG all the assets of the HKG.

Chinese leaders have said in public that China will not touch

a penny of Hong Kong's reserves.

5.

The Chinese view of the constitutional position underlies their demand that HKG should not assume obligations extending

beyond 1997 without their agreement, and that the PRC can

decide which obligations should be assumed by the SARG after

1997. It may also explain their objection to our proposal on

midnight adaptation of laws.

The Legal Position

asset, which are

6. The customary international law/position is that assets, The physical & fricat property

rights and obligations of an extinct) or totally absorbed state

Although Hamptond is not a state. are assumed by the absorbing state? that this requires us to pass to them on 30 June 1997

that all physical property =

*

The Chinese wou, afgue by analogy

and

everything which makes up Hong Kong, including its financial-

MB passed to the in on 30 Jime 1997 of that it is for the PRC to dende to endow the HMG

assets. Although it would be difficult to mount a convincing SAR with these

assets.

Counter argument to this, we could maintain that Hong Kong is a unique case governed by the JD and that the JD contains no

to be passed requirement for us to pass HKG assets to the PRC

ん

and that this

is therefore a matter to be resolved in the JLG. The logical

extension of this argument is that in the absence of an

agreement, we reserved the right to transfer HKG's financial

assets to HMG before or on 30 June 1997, and then to either

keep these assets or grant them direct to the SARG. This

approach would of course be wholly unacceptable to the Chinese, and probably also to the public in Hong Kong should

they become aware of it.

would на

Kome

HKG's

arset

to

рам to the

PRC.

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assets.paper/MONEY/bp

In for the successor state', laws

property

beemes verted point of the state such ana

to determine whether the mite state itself or in a component

tent onal subdivision