GRS 733
SECRET
FM FCO 17104OZ NOV 81
SECRET
TO PRIORITY HONG KONG
TELEGRAM NUMBER 884 OF 17 NOVEMBER
AND TO PRIORITY PEKING (PERSONAL FOR AMBASSADOR)
FOR GOVERNOR FROM CLIFT
MIPT:
1. FOLLOWING IS TEXT OF DRAFT OD PAPER:
QUOTE:
TOP COPY
нки охол
HOLY 137ATELIER NO. 5) 19 NOV 1981
DESK OFFICER
INDGX
A
Action Ad
No
CGE 19/11
Pas volu
233
FUTURE OF HONG KONG: CONTINGENCY OPTIONS
1.
THE ATTACHED PAPER OUTLINES THE PROBLEMS FOR HER
MAJESTY'S GOVERNMENT OF UNCERTAINTY OVER HONG KONG'S FUTURE
WITH THE APPROACHING END OF THE NEW TERRITORIES LEASE IN
1997. THE PRESENT, RELATIVELY PRAGMATIC CHINESE ADMINIS-
TRATION PROBABLY FAVOUR A CONTINUATION OF THE STATUS QUO
BUT ARE UNWILLING TO MAKE ANY HASTY MOVE WHICH MIGHT PRE-
JUDGE THE FINAL OUTCOME FOR THE TERRITORY TO THEIR DIS-
ADVANTAGE. HER MAJESTY'S GOVERNMENT COULD ALSO LIVE WITH
DE FACTO CONTINUATION OF THE PRESENT POSITION WERE IT NOT
FOR THE LEGAL PROBLEM THAT THE BASIS OF OUR ADMINISTRATION
OF THE NEW TERRITORIES WILL EXPIRE IN 1997. MEANWHILE
CONCERN IS GROWING IN HONG KONG ABOUT THE FUTURE.
CONFIDENCE THERE IF IT FALTERED COULD SLIDE QUICKLY,
POSSIBLY WITH A RUN ON
THE HONG KONG DOLLAR AND RAPID WITHDRAWAL OF INVESTMENTS.
THIS WOULD CREATE MAJOR PROBLEMS FOR HER MAJESTY'S GOVERN-
MENT IN OUR RELATIONS WITH CHINA, OVER THE CREDIBILITY OF
OUR COMMITMENT TO THE PEOPLE OF HONG KONG AND DOMESTICALLY.
(TO GIVE ONLY ONE EXAMPLE, LARGE NUMBERS OF HONG KONG
RESIDENTS COULD SEEK ENTRY TO THE UNITED KINGDOM.)
2.
WE NEED SOON TO DECIDE ON THE TACTICS OF DISCUSSION
WITH THE CHINESE ON THIS ISSUE FOR TWO REASONS:
(A) CONCERN ABOUT THE FUTURE IN HONG KONG COULD COME TO A
HEAD OVER THE NEXT 2 OR 3 YEARS AND PRECIPITATE A
SLIDE IN CONFIDENCE:
1
SECRET
/(B)
234
See/244