SECRET
THE BACKGROUND TO THE NEGOTIATIONS
5. In the late 1970's, as
as the period before the termination of the New Territories lease continued to shorten, concern about the future of Hong Kong began to be expressed both in the territory itself and among foreign investors. In particular there was increasing realisation of the problem faced by individual land leases granted in the New Territories, all of which are set to expire 3 days before the expiry of the New Territories lease in 1997. The steadily shortening span of these leases and the inability of the Hong Kong Government to grant new ones extending beyond 1997, would be likely to deter investment and damage confidence.
6.
Her Majesty's Government had by this time, following a detailed examination of the problem conducted in consultation with the then Governor, concluded that confidence would begin to erode quickly in the early to mid-1980s if nothing was done to alleviate the uncertainty caused by the 1997 deadline. Accordingly, when the Governor of Hong Kong visited Peking in March 1979 at the invitation of the Chinese Minister of Foreign Trade, an attempt was made, on the initiative of Her Majesty's Government, to solve the specific
These discussions did not question of land leases expiring in 1997. result in measures to solve the problem.
7. In the course of the next two years there was increasing awareness of the need to remove the uncertainty which the 1997 deadline generated, and some discussion of how this might be achieved. The importance of the issue was publicly stressed by the
In senior Unofficial member of the Executive Council in May 1982. January 1982 Sir (then Mr) Humphrey Atkins, Lord Privy Seal, visited Peking and was given significant indications of Chinese policy towards Hong Kong by Chinese leaders, which confirmed the view of Her Majesty's Government that negotiations should be opened with the
Chinese Government.
SECRET