1

doubt to accept the proposition that treaties with China

involving the transfer of territory are all "unequal"},

The ceded areas of Hong Kong could not be viable separated

from the main industrial areas in the New Territories;

the fretier in Kowloon would be impossible to control;

all the sea end air approaches could be claimed an under

de iure Chinese control as well being under their da

facto control. Continued retention of these areas woulé

sake no sense, either econcaically or politically.

Timing of a negotiated withärgusă

25. A number of relevant factors have been noted in this

repert. As argued in Section D, genuine negotiations

gould not be mounted in present conditions in Chine and we

cannot toro when these may be more favourable.

If we

Bought now to hand the Colony back we could not do so with

any hope of discharging our obligations and responsibilities

towards its people or of salvaging any appreciable portion

of our assets;

er

and there could be serious dams, gre

relations with our allies.

other end of the time

ie determined by the strong probability that publie

s future will start to slip and

confidence in the Colony's future will

the economy to rundown in the 1980s; it would become a

serious liability to us and it would lose its value to

Chine. Al

All this points to an initiative on our part taken

not later than the early 1980s and as soon as there emergen

in China a regine with which we might be able to do

business and which all our allies would be prepared to

countenance » avoiding, however,

avoiding, however, any time whenI

(a) The Hong Kong economy is showing weakness;

(b)

we are under any form of Chinese pressure

either from within or without the Colony,

There are also factors indicating that we should take the

first opportunity that favourable circumstances offer.

/The growth ...

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