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980 CRET
FM HONG KONG 030941Z MAY
TO PRIORITY F.C.O.
TELEGRAM NUMBER 519 OF 3 MAY, 1979.
INFO PRIORITY PEKING.
M.I.P.T.
NEW TERRITORIES LEASES: SUBSTANCE OF PROPOSALS
Hkko.co/,
4 MAY OF9
PA
1. IN DEFAULT OF SOME CHINESE REACTION HOSTILE TO OUR WHOLE PROPOSAL WE APPEAR TO HAVE TO CHOOSE ONE OF THE FOLLOWING COURSES: A) HONG KONG LEGISLATION CREATING INDERTERMINATE LEASES EMPOWERED BY U.K. ORDER-IN-COUNCIL CONTAINING DRAFT CLAUSES 2 AND 3 (AS AMENDED).
B) AS IN (A) BUT WITHOUT CLAUSE 3 OF THE U.K. ORDER IN COUNCIL. C) AS IN (A) BUT WITH NO ORDER-IN-COUNCIL,
2. MY FIRST IPT, 1.E. THAT IT PRODUCES AN EASILY DEFINED AND DEFENDABLE
CHANGE TO A CLEAR-CUT COMPREHENSIBLE SITUATION WHICH NEEDS NO
FURTHER AMENDMENT IF CHINA PREFERS BRITISH ADMINISTRATION TO RUN ON
AFTER 1997. MOREOVER IT WOULD END ANY DOUBTS HERE ABOUT THE UK'S
LONGER-TERM INTENTIONS. BUT IT IS ONLY BEST IF WE CAN DO IT WITHOUT
PROVOKING COUNTER-DEMANDS, A HAGGLE, OR WORST OF ALL A REBUFF THAT
MIGHT BECOME KNOWN HERE.
IN MY VIEW (A) IS BEST FOR THE REASONS IN PARAGRAPH 4 OF
3. IT IS UNLIKELY THE CHINESE REALISE WE ENVISAGE THE COMPARATIVELY COMPLICATED DEVICE OF AN ORDER-IN-COUNCIL AS WELL AS LOCAL ACTION. WHEN THIS IS EXPLAINED TO THEM THEY MAY WELL FEAR THAT IT, AND ITS INCLUSION OF CLAUSE 3, EITHER IN SOME WAY DOES INVOLVE AN ATTEMPT AT UNILATERAL EXTENSION OF THE LEASE, OR THAT IT MIGHT BE SO INTERPRETED BY THE PUBLIC. I THINK THAT TO MEET THIS POINT, AND IN ANY CASE TO AVOID ANY LOCAL MISINTERPRETATION, IN ANNOUNCING THE LEGISLATION WE WOULD NEED TO EXPLAIN THAT THE EFFECT WAS PURELY
PERMISSIVE ON THE BRITISH SIDE AND DID NOT AFFECT THE CHINESE
POSITION.
4. COURSE (C) HAS THE MERIT THAT IT IS SIMPLE, IS PROBABLY THE MOST THE CHINESE EXPECT, AND IS LEAST LIKELY TO RAISE DIFFICULTY FOR THEM, THOUGH AN INCOMPLETE STEP TOWARDS CLEARING THE WAY, ALBEIT ONLY ON THE BRITISH SIDE, TOWARDS A CONTINUATION OF THE STATUS QUO AFTER 1997, THE DELETION OF 1997 FROM LEASES WITHOUT CHINESE OBJECTION WOULD HAVE CONSIDERABLE SIGNIFICANCE. IT IS
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