SECRET

Hong Kong as a Special Administrative Region (SAR)

19.

In such a

If Hong Kong became an SAR, it could again continue

to be a Port of Registry for British ships so long as

there was continuing UK administration.

situation, however, the establishment of a separate Hong

Kong registry with a separate Hong Kong flag could be

envisaged as an expression of increased local autonomy.

This would not create any difficulties for HMG.

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