SECRET
-4-
a) The status of Hong Kong's population and the pressure
on HMG to settle CBDTs in the UK;
b) Divided loyalties among the Civil Service and the Police
and demands on IIMG for special treatment;
c) Need to preserve Hong Kong's separate economy, currency
and position in international economic organisations,
trade and air agreements;
d) The role of the British Garrison, in a transition period
and possibly beyond;
e) Legal problems including:
i) the legacy of the 'unequal' treaties on which
present British rule rests;
ii) reconciliation of continuing British administration
with a recognition of ultimate Chinese sovereignty;
iii) provision of a legal basis for a British contribution
to a new system of government;
iv) legal problems during a transition period;
v) legal problems of citizenship (see (a)).
CONCLUSIONS
13. a) It is unlikely that China will wish to move on a long-term
solution during the next 5 years, but the dangers of
collapse in Hong Kong without one may force her to do so;
b) In the medium-term we should aim at arrangements to
maintain confidence covering the problem of land leases
in the New Territories. This may not be possible without
getting involved in a discussion on fundamentals. We
should not make concessions on sovereignty or a Chinese
representative without substantial undertakings which
SECRET
/would