OR
SEORET
Hanke
A..
المين
125
SECRET
FM HONG KONG 300951Z JUN
TO PRIORITY F.C.O.
TELEGRAM NUMBER 999 OF 30 JUNE, 1979.
INFO PRIORITY PEKING.
по
2 JUL 1979
No 182 18
21
See (131
4M IPT: DRAFT SPEAKING NOTE ON NEW TERRITORIES LEASES.
FOLLOWING IS TEXT:
1. WHEN VICE PREMIER DENG XIAOPING SAW THE GOVERNOR ON 30 MARCH, THE VICE PREMIER SPOKE ABOUT THE FUTURE OF HONG KONG, THE PART IT
COULD PLAY IN THE MODERNISATION PROGRAMME, AND THE NEED TO MAINTAIN
BUSINESS CONFIDENCE AND INVESTMENT. HE SAID THAT HE REGARDED HONG
KONG AS PART OF CHINA AND THAT ONE DAY CHINA WOULD WISH TO MAKE POLITICAL CHANGES, BUT HE COULD NOT SAY WHETHER THIS WOULD BE BEFORE 1997 OR EVEN AS LATE AS THE NEXT CENTURY. HOWEVER, WHATEVER HAPPENED, SPECIAL ARRANGEMENTS WOULD BE MADE TO MAINTAIN LIVING STANDARDS AND GUARANTEE INVESTMENT. HE THEREFORE FORMALLY INVITED THE GOVERNOR, TO TELL INVESTORS IN HONG KONG TO PUT THEIR HEARTS AT EASE. THE GOVERNOR PASSED ON THIS MESSAGE WHEN HE RETURNED TO HONG KONG. THIS HAD A GOOD EFFECT. BUT AS THE GOVERNOR EXPLAINED TO THE VICE PREMIER, THERE IS A SHORT-TERM PROBLEM ABOUT LAND LEASES WHICH CANNOT BE DEALT WITH BY GENERAL ASSURANCES OF THIS
KIND, HELPFUL THOUGH THEY ARE.
2. THE PROBLEM IS THAT, AT PRESENT, ALL INDIVIDUAL LEASES FOR LAND IN THE NEW TERRITORIES END IN 1997. THE HONG KONG GOVERNMENT
CANNOT GRANT LEASES BEYOND THAT PERIOD WITHOUT SPECIAL LEGAL
AUTHORITY, THE REMAINING PERIOD OF EXISTING LEASES, AND THE
PERIOD FOR WHICH NEW LEASES CAN BE GRANTED ARE THEREFORE
STEADILY GETTING SHORTER. THIS DOES NOT PREVENT SPECULATIVE
INVESTMENT. WHICH ALSO HAS THE EFFECT OF INFLATING THE PRICE OF LAND, BUT IT IS ALREADY BEGINNING TO DETER THE TYPE OF
INDUSTRIAL DEVELOPMENT OF MOST VALUE TO THE ECONOMY, SOME VERY
LAPGE AND BENEFICIAL LONG-TERM INVESTMENTS ARE BEING MADE, BUT
SEORET
I WE KNOW