CONFIDENTIAL

(ii)

(iii)

9.

the extent to which they are owned by PRC interests; and

increasingly attach to

the political sensitivity which will

the requisition of Hong Kong ships as 1997 approaches. (Since the Chinese regard Hong Kong as part of China, even in

advance of 1997, and Hong Kong BDTCs as Chinese nationals,

requisition of ships owned by such persons in Hong Kong could

well be regarded by Peking as requisition by the UK of

Chinese ships in Chinese territory).

The Home Office have recently informed us

that, in that, in the event

of emergency, special legislation which has been drafted to cover, inter alia, enhanced powers of requisition, would only be extended

to Hong Kong by Order in Council after consultation with us.

Earlier they had proposed automatic extension.

CONFIDENTIAL

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