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SECRET

-2-

DSR 11C

c) Continuance of Status Quo beyond 1997 with

Chinese acquiesence

Prospects: Easier than (b).

Chinese could take line that

1997 is British problem. But Peking might still object to

any UK legal device as basis for continuing administration

of New Territories.

Implications for HMG: May not be sufficient to maintain confidence, but will depend on context.

Indefinite duration of administration would continue

تخطتانی

uncertainty.

d) Continuance of Status Quo beyond 1997 with concessions

(acknowledgement of Chinese position on sovereignty

and acceptance of Chinese Representative) not

requiring legal changes.

Prospects: Possible, but might not go far enough for Chinese.

Implications for HMG:

UK concessions would need to be

balanced by Chinese statement giving promise of long

duration. But legal problem of basis of rule. Distinction between acknowledgement and acceptance of Chinese position on sovereignty perhaps too fine to guarantee confidence.

SECRET

/e)

Dd 0532000 400 M 5/78 HMSO Bracknell

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