TOP SECRET
necessity to preserve its own authority in Hong Kong and the need no to antagonise China to such an extent that the latter is driven to change her policy of tacit acceptance of the status quo.
this balance has been achieved with remarkable success.
Effect of the approach of 1997
46.
So far
Quite apart from the possibilities discussed in the preceding paragraphs of the Chinese seeking to eject us from Hong Kong before 1997, the very existence of a date on which the lease of the New Territories expires is already beginning to cast its shadow before it. This shadow will, in the best circumstances, grow increasingly large and the life of Hong Kong, both economic and social, will become increasingly stunted.
47. Annex B sets out some of the effects of the approach of
1997, including some which are already apparent.
48.
As these effects become more marked Hong Kong may require assistance from the U.K. in a number of ways (possibly economic assistance if industry and trade stagnates, the buttressing of the civil service and action to ensure that communications with the outside world are maintained at an appropriate level). Departments of H.M.G. should give sympathetic recognition to
these needs as they develop.
49. Further study of this factor will be required in consultation with a wider circle in Hong Kong than can be
associated with the preparation of this paper. Given the limited circle within which, for security reasons, the study must be confined, it must be accepted that the outcome will not be a study in depth.
50.
Another aspect of the approach of 1997 is the bearing this has on the social policies which we pursue in the meantime. Hore we are faced with a dilemma. If we administer the Colony in a manner which accords fully with our own concepts of social justice we will widen the gap between Hong Kong and China and thus may make the transition to Chinese rule more difficult for the inhabitants of Hong Kong. But deliberately to keep down rising standards in an attempt to equate them with conditions in China ✓is not only repugnant but carries with it the risk that orderly government in Hong Kong may be made more difficult. This is a touch practical and, indeed, moral problem which will need to be
further studied in consultation with the Governor.
TOP SECRET
/ F.
Page 60Page 61