CONFIDENTIAL
BACKGROUND NOTE FOR SUPPLEMENTARIES
THE SECRETARY OF STATE'S VISIT TO HONG KONG
1. The Secretary of State will be in Hong Kong from 29 March
to 1 April before visiting China and Japan. These visits were
originally scheduled for last Autumn but had to be postponed on
account of the Iran-Iraq war. While in Hong Kong, the Secretary
of State will discuss a range of topics with the Governor and
senior officials, including issues affecting the Territory that
may be raised in Peking. Among these will be preservation of
confidence and land leases in the New Territories. There are no
plans to raise the status and long-term future of Hong Kong with
the Chinese although land leases overlaps with this.
LAND LEASES IN THE NEW TERRITORIES
2. Crown land leases in the New Territories are all written to
end in 1997 when the lease terms set by the Convention of Peking (1898)
expire. There is no legal basis for granting leases beyond that year.
The normal period for mortgages is 15 years. From mid-1982 this
period will need to be shortened. This is bound in time to have an
A legal
adverse effect on investment and general confidence.
solution will need to be sought before long. The problems of land
leases and confidence were raised with the Chinese Foreign Minister,
Huang Hua, last October, and may come up again during the Secretary
of State's visit to Peking. But this should not be disclosed to the
House.
CONFIDENTIAL
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