Mr Cortazzi

SECRET

Hak asof

RAVEVED IN REGN

INDEX

720.

29. OFT 1979

202

Y

HONG KONG: NEW TERRITORIES LEASES

по

Jisico

A

B

136A

195

E

F

197

Problem

1. The Chinese have rejected the proposals for dealing with

the problem of land leases in the New Territories which were put

to them by HM Ambassador in Peking in July.

Recommendation

2

In minuting to the Prime Minister and his other OD colleagues

about this problem in July, the Secretary of State undertook to

FED concur. keep them informed. I submit a draft minute for this purpose. /

Background

3. The Secretary of State's minute of 2 July summarised the

background to this problem and set out the steps we proposed to

take to deal with it. Mr Cradock explained our proposals in

detail to the Chinese Assistant Foreign Minister, Song Zhiguang,

on 5 July and left a copy of his speaking note. Follow-up action

was subsequently taken in London and in Hong Kong.

4.

On 24 September Mr Song summoned the Ambassador and handed

him a memorandum containing the Chinese reply (Peking telegrams

Nos 825 and 826). This described the legal measures which we had

proposed as "unnecessary and inappropriate"; urged us not to

proceed with them; and warned of adverse repercussions if we

should persist.

5. Mr Cradock's comments are in Peking telegram No 827 and

They those of Sir M MacLehose in Hong Kong telegram No 1343.

agree that there can be no question of going ahead with the

SECRET

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