DRAFT
SECRET
FUTURE OF HONG KONG: OPTIONS AND PROBLEMS
SUMMARY
1.
The attached paper reviews possible options for the future of
Hong Kong in the medium and long-term and the implications for
HMG.
conclusions.
This note summarises the main points and draws provisional
They will be greatly affected by the attitudes of the
Chinese. We know very little of their intentions and indeed it
is highly likely that they have not yet faced up to the issues
involved.
BRITISH AND CHINESE POSITIONS
2. HMG's interest in maintaining confidence in the Territory is
complicated by legal problems over the expiry of the New Territories
Lease in 1997. The Chinese Government share this interest, but
are not under similar constraints, and are likely to reserve their
position while giving general encouragement to Hong Kong's economic
stability. They will probably wish to delay coming to grips with
the long-term issues until much nearer 1997.
MEDIUM TERM
3. We need to reach agreement with the Chinese as soon as is
practicable on ways of maintaining confidence within the Territory
and among outside investors; the problem of individual land leases
is important here. The Chinese may meet us on this, possibly
through acquiescence in our actions rather than by formal
agreement.
In any
But it is equally possible that they may be reluctant
to admit the need for a solution, at least at present.
case, they might in return seek concessions from HMG on:
a) a British acknowledgement of ultimate Chinese sovereignty;
b) agreement to the appointment of a Chinese Government
SECRET
/representative
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