SECRET
LORD CARRINGTON'S VISIT TO CHINA: 2-6 OCTOBER 1980
BRIEF NO 8(b):
LONG TERM FUTURE OF HONG KONG AND INDIVIDUAL
LAND LEASES IN NEW TERRITORIES
POINTS TO MAKE
PREVIOUS CONTACTS
1.
Problem discussed on several occasions between Ministers, most
recently during Chairman Hua Guofeng's visit to London. Also useful
contact with Hong Kong officials. Have noted in particular Vice
Premier Gu Mu's remarks to Sir Philip Haddon-Cave. Note that he
said it was time to begin thinking about the longer term. We agree.
CHINESE ASSURANCES
2.
Appreciate Chinese assurances to intending investors in Hong
Kong. Do these assurances apply equally to leaseholders in the
New Territories?
Would they be prepared to say so publicly, or
confidentially to intending investors? In any case I shall have to
make some public comment for the press about our discussion
on Hong Kong.
LAND LEASES
3. As Gu Mu himself remarked, there are specific practical problems.
These include problem facing investors over land leases in the New
Territories. Legal and financial difficulties will get more acute,
particularly when there are less than 15 years to go to 1997 (mort-
gages normally run for 15 years). Solution has to be found within
12 to 18 months. Otherwise commercial confidence and possibly Hong
Kong dollar could be affected. If there is a loss of business
confidence it would be difficult to recover and Hong Kong economy
could cease to grow.
4. (If the Chinese ask for our views on a solution to leases
Time is right for us to start talking about ways in which
problem)
SECRET
/leases