+
15. Thus there are at present (and for the foreseeable future) only two prospects for Hong Kong, i.e. to remain a Crown Colony or
Whether its return to China could ever to be reincorporated in China.
be successfully negotiated or some accommodation reached on a special status seem quite unprofitable subjects for study at the present time; we may in fact never be in a position to negotiats. Moreover, having regard to the present situation and the value of the Colony to us there are no good reasons why we should contemplate giving it up.
16. At some stage, an the lease draws to its conclusion, it is inevitable that confidence in Hong Kong's continuing existence as a separate entity shouïd ebb and economic activity should run down, with consequent effects both on its viability and its stability. The significant factor is likely to be the point of time when, in an economy used to the rapid amortisation of capital, investors can no longer be sure of getting a full return on their investment before
Situation to arouse China forecloses. We would expect this point to be reached not later
Abent
hon bly
that 1985 (probably a few years earlier). This may be the time when,
faute de mieux, we should consider negotiating a settlemont with China (if we have not already been forced to the Conference table
or had it wrested from us
Effect of British Withdrawal from Malaysia/Singapore
17.
Our withdrawal from Malaysia/Singapore is likely to concentrate
the attention of our allies on our intentions in Hong Kong. We have no political commitments to any of them in relation to Hong Keng, although we did tell the Americans in 1960 (in reply to an enquiry from Mr. Herter, the U.S.Secretary of State) that "it is indeed our intention to resist
We can aggression against Hong Kong in whatever form it might come”. expect a renewal of such enquiries, probably to test the extent of
our disengagement in the area.
18. China would probably see our withdrawal as the inevitable defeat
It would not be regarded by of imperialist interests in the area. itsèåf as a signal or a reason for a Chinese initiative against the Colony. The considerations referred to in paras. 10 and 11 above would continue to apply. But inasmuch as it might be regarded as a weakening