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3. In the light of this we think that it is premature to speculate on what the Chinese attitude will be to the 1997 date. There have been signs that the end of the lease might be regarded by the Chinese as the occasion when "conditions are ripe". In October 1971 Chou En-ki told Mr Malcolm MacDonald that China had no intention of seeking to get Hong Kong back until the expiry of the New Territories leases; 1997 was also given some significance in the statement given at a lunch in Hong Kong in September last year by Stanley Ho, a pro-communist Hong Kong resident and by an NCNA man (reported in Alan Donald's letter of 24 September 1975, copied to Richard Samuel). But, on the other hand, it is scarcely to be expected that they could decide now whether economic or political factors in China will make it undesirable to continue special arrangements for Hong Kong after 1997. On balance they appear at present to want to avoid being pinned down to the date, should they choose not to make an issue of the lease then,

ever

Yours

quer

JFR Martin

Far Eastern Department

cc: C Drace-Francis Esq

APA, Hong Kong

Chancery, Peking

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