DRAFT
SECRET
LORD CARRINGTON'S VISIT TO CHINA: 1-5 APRIL 1981
-DSR 11C
BRIEF NO
: LONG-TERM FUTURE OF HONG KONG AND INDIVIDUAL LAND LEASES IN THE NEW TERRITORIES
:
POINTS TO MAKE
PREVIOUS CONTACTS
1. Problem discussed on several occasions between Ministers,
most recently during Chairman Hua Guofeng's and Foreign
Minister Huang Hua's visit to London. Also useful contact
with Hong Kong officials. Have noted in particular Vice
Chairman Deng's statement to the Governor and also Vice
Premier Gu Mu's remarks to Sir Philip Haddon-Cave. Note that
he said it was time to begin thinking about the longer term.
We agree ..
LAND LEASES
2. General confidence holding, but volatile Once market
begins to slide, will be difficult to stop and may affect
Hong Kong dollar. One important problem that of land leases
in New Territories. Fast becoming symbol of uncertainty
over future. Present need to terminate leases in 1997
threatens to be major investment problem as time approaches
(mortgages normally run for 15 years). Solution vital next
year or two.
CHINESE ASSURANCES
3.
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.
SECRET
/LONGER TERM
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