SECRET
5. With the agreement of the previcus Government,, the
Governor took the first step in telling the Chinese what we were
thinking of doing during his visit to Peking in March. He
deliberately put the matter in general terms and treated it in
a low key. The indications are that the Chinese may not have
fully understood what we are intending to do. I have, therefore,
agreed that we should follow up the Governor's exploratory move
by telling the Chinese in more detail what we propose to do.
Clearly we cannot go ahead with the Order in Council unless we
are satisfied that the Chinese have understood what we propose
to do, have had time to consider it, and to object if they wish.
The Ambassador in Peking hopes to take action in the next week.
The Chinese reaction to this further approach by the Ambassador
should make this clear.
6. If the Chinese do not object to what is proposed, we should
make the Order in September so that something can be said about
the future of the leases in the Governor's Legislative Council
statement in Hong Kong in October. If the Chinese do react
unfavourably, our approach will have been made in private and
no harm to our relations will have been done.
7. I shall keep you and our colleagues in OD, to whom I am
sending copies of this minute, informed. I am also sending a copy to the Attorney-General and to Sir John Hunt.
Foreign and Commonwealth Office
2/7/79
SECRET
С
(CARRINGTON)