(ALCE CHO
1.
Mr Williamson Mr Quill & 12/2
Jwvilian
12.2,
Mr Clift
SECRET
Lifenfering CHOI RECEIVED IN
HOTY NO. $1
18FER SO
DERK OFFN INDEX
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19/2
Separate node discordant Messrs Cortagge
New Territare's Leases: Mr Clift's visit to Hong Kong
Manay
s
Our present positions on de questions of land leases in de New Territories and what we should
Fotle
Flag A Kong
say
to de Chinese is
given
in
the record of a meeting between Mr Blaber and the Governor of Hong
on 11 January. The background to the problem and the we have taken so far is given in the Lovief that
given in de brief that was prepared for Flag C that meeting. The text of the "Chinese reply of 24 September is attached for reference.
Flag
steps
2. In
you
M
he
caft's discussions with the Governor in Hong Kong, will wish to be aware of a confidential letter which de latter has (cheived from the Advisory Committee on Diversification. Whether or not Flag D
the authors are a little naïve, de letter does provide a useful weather-vane to de chinking of te local business community on 1997 etc. Paragraph 5 of the letter is particularly interesting in that it points to a solution (or amationation) of the problem (see para 3 (i) below).
nuvestment beyond 1997) malty Jeruny
as a
CODE 18-77
possible
HM
3. The Governor has undertaken to discuss the whole problem with Ambassador, Pezing. Unless the Chinese themselves come up with further abservations on proposals beforehand, it is difficult to suggest how we night proceed. The following are very rough, out-lines of possibilities:
permit amortization I capital (:) encourage auditors in Hong Kong to "soft-pedal" on de significance If to year 1997. This picks up the point made in the para 5 of the confidential letter from the Advisory Committee Diversification. Conventional accounting practices, it seems, require auditors to draw attention to de significance of 1997, and they will find it increasingly difficult to accept the (legally unjustified) assumption that
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SECRET.
on
private