+
DSR 11C
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might concede a wide degree of autonomy in return for a
British concession on sovereignty. It is uncertain whether
the Chinese would be able to accept a form of autonomy
including formal agreement to continuing British adminis-
tration. On the other hand, it is doubtful whether the
Hong Kong population or investors in the Territory would
regard anything less as providing sufficient reassurance.
(Chinese history in recent years gives little encouragement
that a Chinese administration would provide the economic
and political framework within which Hong Kong thrives.)
Although the Hong Kong economy remains remarkably
buoyant in a period of world recession, it is based on
Hong Kong continuing as a major financial and trading, as
well as industrial centre. There is so far no sign of
investors being put off but there is speculation about the
prospects after 1997. A major problem is that Crown land
leases in the New Territories are timed to expire by the
There is also concern over such questions
as citizenship. There are increasing demands for an
agreement between Britain and China over the future.
7.
end of June 1997.
8.
A slide in confidence would be disastrous for the
Territory if allowed to continue. On the other hand, it
could also provide the impetus for the Chinese to engage in
substantive discussions (they would stand to lose most in
economic terms). It is nevertheless unlikely that we would
get anything like a final solution to the problem in such
circumstances.
9.
The contingency paper outlines a number of options
which might at least provide such medium-term reassurance.
It is impossible to forecast what might emerge Probably
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