SECRET
DSR 11C
SECRETARY OF STATE'S VISIT TO CHINA:
FUTURE OF HONG KONG
Points to Make
Otherwise no
gonth.
Reinustment lounbeds as
Bull As
Properly
1.
Problem discussed on several occasions between Ministers,
most recently during Premier Hua Guofeng's visit to London.
2. Appreciate Chinese assurances to intending investors in
Hong Kong. Practical problem for investors in New
Territories remains, however. A legal and financial diffi-
culty. Will get more acute, particularly when there are less
than 15 years to go to 1997 (mortgages normally rung for
15 years). Commercial confidence and possibly the Hong Kong
dollar could be affected.
3. Do not intend to revert to the proposals made last
summer. But we need to talk about ways in which leases might
be issued on terms acceptable to investors.
officials discuss this.
Suggest that
4. Are there other ways to underline the assurances already
made? Can it be made clear that they apply to land at present
leased from the Crown in Hong Kong? A public assurance would
be best.
5.
(Depending on the Chinese reaction) It is not too soon
to open a dialogue on the longer-term future of Hong Kong.
This is in both our interests. We need to understand each
other's position. We need at the same time a means of dealing
with the New Territories leases question, which need not
affect the position of either side on the longer term.
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