SECRET
SECRETARY OF STATE'S VISIT TO HONG KONG: 30 JUNE
BRIEF NO 6: NEW TERRITORIES LEASES
OBJECTIVE
1.
The Governor is anxious to make early progress on the
question of land leases in the New Territories.
As HM Ambassador
in Peking will be in Hong Kong during the Secretary of State's
visit, Lord Carrington may wish to take the opportunity to go
over the ground in a restricted meeting.
THE PROBLEM
2.
Relations between China and Hong Kong are now better than
at any time since 1949. The Chinese have made it plain that Hong
Kong has an important part to play in China's modernisation pro-
gramme; that they expect the status quo to remain for a long time
to come; and that investors have no cause for concern about China's
intentions. All this has had a good effect on confidence. But
there is one practical problem which cannot be dealt with by
general assurances of this kind. The bulk of the territory of
Hong Kong (the New Territories) was leased from China in 1898
under an Agreement which expires in 1997. The many thousands of
land leases granted by the Crown in the New Territories also end
in 1997. Although there is no immediate problem, the increasingly
short span of existing leases, and the inability of the Hong Kong
Government to grant new leases extending beyond 1997, will soon
begin to deter investment unless something is done.
THE PROPOSED SOLUTION
3. The solution which we have in mind is to issue future land
leases in the New Territories without a fixed term, and to convert
/existing
SECRET