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LAND LEASES
3. GENERAL CONFIDENCE HOLDING, BUT VOLATILE. ONCE MARKET
BEGINS TO SLIDE, WILL BE DIFFICULT TO STOP AND MAY AFFECT MUTUAL
INTERESTS IN HONG KONG, VALUE OF HONG KONG DOLLAR, INVESTMENT
ETC. ONE EXAMPLE OF THE PROBLEM IS LAND LEASES IN NEW TERRI-
TORIES. FAST BECOMING SYMBOL OF UNCERTAINTY OVER FUTURE.
PRESENT NEED UNDER UK LAW TO TERMINATE LEASES IN 1997 THREATENS
TO BE MAJOR INVESTMENT PROBLEM AS TIME APPROACHES (MORTGAGES
NORMALLY RUN FOR 15 YEARS). EITHER AMENDMENT OF UK LAW OR SOME
AGREED SOLUTION VITAL NEXT YEAR OR TWO.
CHINESE ASSURANCES
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4. APPRECIATE CHINESE ASSURANCES TO INTENDING INVESTORS IN
HONG KONG. DO THEY APPLY EQUALLY TO LEASEHOLDERS IN NEW
TERRITORIES? WOULD CHINESE BE PREPARED TO SAY SO PUBLICLY OR
CONFIDENTIALLY TO INTENDING INVESTORS? CLEAR HOWEVER THAT
CONFIDENCE WILL NOT BE MAINTAINED FOR LONG BY GENERAL ASSURANCES.
PRACTICAL ISSUES REQUIRE PRACTICAL SOLUTIONS, SO SENSIBLE TO ACT
ON LEASES BEFORE SLIDE IN CONFIDENCE STARTS.
LONGER TERM
Ja va kenge, and 26 s skrbel na úro
5. RECOGNISE DISTINCTION BETWEEN LONG-TERM FUTURE AND IMMEDIATE
CONCRETE PROBLEMS. NOT TOO SOON TO BEGIN THINKING SERIOUSLY
ABOUT LONG-TERM FUTURE. BUT EMPHASISE NOT OUR INTENTION TO
TRY AND TACKLE LONG-TERM THROUGH LEASES ISSUE. NEED FOR MEANS OF
DEALING WITH LEASES THAT WILL NOT PREJUDICE POSITIONS OF EITHER
SIDE ON FUTURE.
REACTION TO CHINESE REPONSES
5. (IF CHINESE DO NO MORE THAN REPEAT PREVIOUS ASSURANCES):
MUST KEEP IN TOUCH ON PROBLEM. BUT CANNOT DELAY TOO LONG AND
WILL NEED TO DISCUSS IMMEDIATELY IF CRISIS OF CONFIDENCE APPEARS
IMMINENT.
ö. (IN RESPONSE TO ACCEPTANCE OF NEED TO ACT NOW): DETAILED
PROBLEM. SHOULD BE DISCUSSED BY OFFICIALS. SUGGEST THEY BE
ASKED TO RECOMMEND MEASURES TO MAINTAIN CONFIDENCE OF INVESTORS
IN HONG KONG ECONOMY AND TO ENSURE CONTINUING PROSPERITY AND
STABILITY OF THE TERRITORY.
OF INDIVIDUAL LAND LEASES.
MEASURES SHOULD INCLUDE QUESTION
MUST NOT CONFLICT WITH THE POSITION
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