HKK 4/1 (Annex)
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Not to travel.
SIR MICHAEL PALLISER'S VISIT TO HONG KONG:
ADDITIONAL BRIEF
7-9 OCTOBER 1975
Y right!
HONG KONG: LONG RANGE PLANNING
1.
In January Lord Goronwy-Roberts suggested to the Secretary
of State that the Office might consider whether a long term arrangement for the future of Hong Kong could be probed with the Chinese without precipitating a crisis, otherwise uncertainty would grow as 1997 (the year in which the New Territories Lease expires) approached. The Secretary of State suggested that we should look at the future from the point of view of the value of Hong Kong to the United Kingdom. Work is now proceeding on a paper setting out the considerations. It will be shown in draft to the Governor, Hong Kong, when he is in London in November; and the aim will be to present it to the Secretary of State later that month in order that he can focus on the issue well in advance of his visit to Hong Kong and Peking in April/May next. Mr Youde has already commented on the paper in outline.
2.
The conclusions reached so far are:
(a) that the existence of Hong Kong offers certain positive
advantages to Britain which may well decline over the next two decades;
(b) that there are certain liabilities which may increase
over the same time span;
(c)
(a)
that the contingent immigration liability in respect of more than two million British subjects of Chinese origin, and particularly those (perhaps 200,000) to whom we owe a particular debt, argues very strongly in favour of the retention of the status quo; and decisively against a forcible takeover by China;
that the Chinese for the foreseeable future have a strong practical interest in the maintenance of the status quo in Hong Kong (e.g. as the source of 40% of Chinese total foreign exchange earnings);
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