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leases might be issued on terms acceptable to investors.

Suggest

that officials open discussions and that an exchange of views with

HM Ambassador continues after the visit (see Supplementary Brief).

LONGER TERM

5. (If the Chinese ask about longer term problems): Not too soon

to begin thinking seriously about the longer term future of Hong

Kong. In both our interests. Need to understand each other's

position. But need at the same time means of dealing with issue of

individual land leases in the New Territories without affecting

position of either side on longer term.

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