SECRET
ANY LEGAL OBSTACLE ON THE BRITISH SIDE TO THE GOVERNOR CONTINUING
TO ADMINISTER THE NEW TERRITORIES AFTER 1997 WOULD BE REMO’
BY AN ORDER IN COUNCIL. THE ORDER WOULD NOT REQUIRE AN AFFIRMATIVE
VOTE IN THE HOUSE OF COMMONS. THESE MOVES WOULD MAKE IT POSSIBLE
FOR BRITISH ADMINISTRATION TO CONTINUE BEYOND 1997 IF THE CHINESE
SO WISH. BUT THEY DO NOT CONTRADICT THE CHINESE POSITION ON HONG
KONG, NOR DO THEY CALL FOR ANY RESPONSE FROM THE CHINESE OR ANY
ACTION BY THEM. NEVERTHELESS, WE NEED TO KNOW THAT THE CHINESE ARE
NOT GOING TO GIVE A PUBLIC REDUFF BEFORE GOING AHEAD.
WITH THE AGREEMENT OF THE PREVIOUS GOVERNMENT, THE GOVERNOR TOOK
THE FIRST STEP IN TELLING THE CHINESE WHAT WE WERE THINGKING 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 INCOUNCIL 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.
IF THE CHINESE DO NOT OBJECT TO WHAT IS PROPOSED, WE SHOULD LAY
THE ORDER IN SEPTEMBER SO THAT SOMETHING CAN BE SAID ABOUT
THE FUTURE OF THE LEASES IN THE GOVERNOR'S LEGISLATIVE 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.
I SHALL KEEP YOU AND OUR COLLEAGUES IN OD, TO WHOM I AM COPYING
THIS MINUTE, INFORMED.
ENDS
FCO PLEASE PASS ALL
HUNT
FILES
HRAD, (b)
FED
PS
PS LPS
[PASSED AS REQUESTED]
PS/MR RIDLEY
PS MR BLAKER
PSIPUS
MR MURRAY MR RUSHFORD,
2
COPIES SENT TO
NOIO DOWNING ST