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are written to expire in 1997; there is a risk that, as this date
draws closer, businessmen will cease to invest there leading to
a serious loss of confidence. The Hong Kong Government's assessment
is at Annex A.
Previous UK Proposal
6.
The Chinese rejected a solution we proposed in July 1979. This
would have involved issuing leases without a terminal date. The
Chinese probably objected mainly to proposal for an Order in Council
that would make it possible for British administration to continue
after 1997 should the Chinese (and, of course, the British) Government
so wish.
Possible Official Talks
7.
Chinese leaders may not be ready for detailed discussion of the
problem, particularly just after the formation of a new government.
But there may be an opportunity for further talks between officials.
A supplementary brief for this is attached.
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