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Such a change could, of course, be made through a new Treaty but
the Chinese are unlikely to agree to that. The case of Macao provides
only a partial analogy. The Treaty of 1887 did not formally cede
It placed it under 'perpetual occupation
that Territory to Portugal.
and government by Portugal, as any other Portuguese possession'; but
by an additional Article Portugal undertook 'never to alienate Macao
without previous agreement with China'. This clearly implied a
limitation on absolute Portugese sovereignty and probably facilitated
a confidential understanding believed to have been concluded between
China and Portugal when the establishment of diplomatic relations
were negotiated in 1978 and 1979. By this, Lisbon is believed to have
conceded Chinese ultimate sovereignty over Macao. But attempts to
obtain confirmation of this have so far been unsuccessful.
Comparisons with Macao are further discussed at Annex D.
16. It would be theoretically possible for HMG unilaterally to
amend the Order in Council of 1898 to as to extend beyond 1997 the
period of British administration over the New Territories. But it
would be unwise to act without Chinese agreement as there would
certainly be a strong adverse reaction by China and that would
immediately undo all the political benefit to confidence.
preserve confidence we would therefore need at least a statement by
Peking that the status quo (i.e. a separate British administration)
would continue. At a point nearer to 1997 we may need to find some
way to accommodate an exchange of statements on these lines.
In order to
17. An alternative possibility, however, might be to negotiate an
an exchange of statements in which the Chinese asserted their
sovereignty over the whole of Hong Kong, the UK acknowledged the Chinese
position, and both parties agreed that 1997 no longer had any practical
significance. This would follow the precedent of the statements on
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