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ation Texen
DESK BY 020100Z
FM F C O 0117172 OCT 80
TO IMMEDIATE HONG KONG
TELEGRAM NUMBER 865 OF 1 OCTOBER.
INFO IMMEDIATE PEKING.
FROM YOUDE
MIPT: VISIT OF CHINESE FOREIGN MINISTER : HONG KONG
A
1. LORD CARRINGTON ALSO RAISED THE QUESTION OF LEASES. THE NATURE OF THE PROBLEM WAS EXPLAINED TO HUANG IN GENERAL TERMS. THERE WAS
SO A PRACTICAL DIFFICULTY WHICH WAS NOT IMMEDIATE BUT WOULD BECOME BY 1982, IN PARTICULAR BECAUSE OF THE EFFECT OF THE 15 YEAR MORTGAGES. IT WAS A QUESTION OF MAINTAINING THE CONFIDENCE OF INVESTORS. GUANG HUA SAID THAT THE 2 SIDES HAS ALREADY EXCHANGED VIEWS. THE BRITISH GOVERNMENT HAD PROPOSED A SOLUTION INVOLVING LAND LEASES WITHOUT A TERMINAL DATE. THE CHINESE GOVERNMENT HAD STUDIED THIS IDEA AND HAD SEEN DIFFICULTIES IN IT. DENG XIAOPING HAD TOLD YOU THAT CHINA WOULD NOT DO ANYTHING WHICH WOULD ADVERSELY AFFECT THE INTERESTS OF INVESTORS. THAT HAD BEEN AN AUTHORITATIVE STATEMENT OF THE CHINESE POSITION. THEY THOUGHT IT SHOULD BE SUFFICIENT TO MAINTAIN THE CONFIDENCE OF INVESTORS. LORD CARRINGTON SAID THAT THE PROPOSAL WE HAD MADE HAD NOT NECESSARILY BEEN THE RIGHT ONE. BUT THE PROBLEM COULD NOT BE DEALT WITH ENTIRELY BY GENERAL ASSURANCES. SIR P CRADOCK MIGHT FOLLOW UP THE MATTER IN DUE COURSE IN PEKING, WHEN BOTH SIDES HAD HAD AN OPPORTUNITY TO
REFLECT.
CARRINGTON
LIMITED FED
HKG GD
PS. PS LPS PS MR BLAKER PS/PUS
SIR.E.YOUDE MR DONALD
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