SECRET
ESSENTIAL FACTS
The New Territories: Press Line
1. The press line recommended in the 'Points to Make' is similar
to that used during Chairman Hua Guofeng's visit last November.
Land Leases in New Territories
2. Any form of lease running beyond 1997 would be more credible
if the first of its kind were granted to a Chinese Government agency
or official organisation in Hong Kong. There have been, as yet
unconfirmed, indications that the Chinese state-trading organisation,
China Resources, or an associate, may seek such an extended lease
at Tin Shui Wai in the New Territories.
3.
With this proviso, there are two broad alternatives:
a) fixed term (say 25 years) leases extending beyond 1997. These
should provide reasonable reassurance for investors but
would imply (though not state) some form of British
administration after 1997. They could thus pose political
problems for the Chinese.
b) a periodic lease renewable each year unless either party
terminated it. This would not imply post-1997 jurisdiction
so directly, but it would be less attractive to investors.
4. An additional problem over (a) is that it would probably require
a fresh legal basis since the power of the Hong Kong Government to
act in this way is not clearly established. It could be put beyond
doubt by an Order in Council. This would not refer to the
continuance of British administration of the New Territories after
1997, although it would imply it. It is not possible to gauge the
Chinese reaction to such a move.
SECRET
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