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DSR 11C
FUTURE OF HONG KONG
OPTIONS AND PROBLEMS
1. The attached paper reviews possible options for the
future of Hong Kong in the medium and long term and the
implications for HMG. This note summarises the main points
and draws conclusions.
BRITISH AND CHINESE POSITIONS
2.
The present British interest in maintaining confidence
in the Territory is complicated by legal problems over the
expiry of the New Territories lease in 1997
China, which
shares this interest, is not however under similar constraints.
The Chinese Government are likely to reserve their position
while giving general encouragement to Hong Kong's economic
stability. They will probably delay coming to grips with the
long-term issues until much nearer 1997, but will not feel
tied to action geared to that particular date.
MEDIUM TERM
3.
We need to reach agreement with the Chinese as soon as is
practicable
on a means of extending individual land leases in the
New Territories; this is the most immediate problem affecting
confidence. The Chinese may meet us on this, probably
through pragmatic moves rather than formal agreement. However
they might in return seek concessions from HMG on;
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Dd 0532000 400 M 5/78 HMSO Bracknell