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On the latter point, what is needed is minimal amendment that would cause the lease possible difficulty with Peking but which would enable the Governor at any rate to issue land leases beyond 1997. What the departmental legal adviser has proposed is a simple deletion of the words 'and for the term' from Section I of the Order in Council. This seems to provide the necessary latitude while avoiding any specific reference to the continuance of British administration.
There are two essential points to be borne in mind. The first is that HMG would consider giving effect to such a proposal only if it became absolutely necessary to do so from a political and economic point of view. The second is that the proposal would almost certainly be part of a package for which HMG would have to get at least Chinese tacit acquiescence. Having gone as far down the road with them as they have in exchanges on this problem, HMG would not get away with unilateral action now. But it is hoped that if there were real signs of confidence in Hong Kong being eroded the Chinese leadership themselves would be convinced of the need for action, although they would very probably, as the draft paper points out, require some kind of
gesture op HMG's part over sovereignty.
The Attorney's views on this matter would be welcome as soon as possible since it is desired to get the contingency paper agreed by Ministers without too much delay. The delicacy of this subject must be stressed. HKGD are limiting knowledge of the planning on Hong Kong's future to a very small group in the FCO.
Hong Kong & General Department Foreign & Commonwealth Office
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3 July 1981