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ided. The formula for public consumption is consistent with the signals about current Chinese attitudes manifest in their actions in specific situations (see Annex A). It also carries the corollary that for China the internal affairs of the Colony are an exclusively British responsibility with the proviso that nothing should be done internally (eg in the way of developing representative institutions) which could infringe the Chinese claim that Hong Kong is, and will remain, a part of China.

13. But China's attitude towards the Colony has varied with the years and the fact that it is at present favourable, provided the status quo is maintained, is no argument for believing that it will continue to be so for the foreseeable future. Recent events in Peking confirm that there are two main risks; that the ideologues will gain ascendancy over the pragmatists in the Chinese Government that succeeds the present one on the death of Mao; and that there may be a struggle for power between the two with consequent disturbances in China similar to the Cultural Revolution which spilled over into the Colony in 1967. The pragmatic arguments would seen likely to weaken over the years: but even so the Chinese might be persuaded of the advantage of a continuing separate status for Hong Kong as an outlet for her exports end centre for her invisible trade; and of the disadvantage of any attempt quickly to absorb a reluctant population accustomed to a different way of life to that on the mainland. balance a sudden change of attitude by China seems unlikely but the long term trend is probably unfavourable to the prospect of Hong Kong's continued existence as a Colony.

14.

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A major consideration is the running out of the lease on the New Territories in 1997. On our interpretation of international law, there is a distinction between the status of the New Territories held on a 99 year lease under the Second Convention of Peking (1898), and that of the Island of Victoria, the southern tip of the Kowloon peninsula and Stonecutters Island, ceded in perpetuity by the 1842 Treaty of Nanking and the 1860 Convention of Peking. However, the logic of the Chinese position that all three treaties were "unequal" and hence invalid makes the distinction more theoretical than real;

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