CONFIDENTIAL

نه

conclusion of the lease of the New Territories in 1898 which set a term to the lease of 99 years ending in 1997. These instruments were regarded by all Chinese as part of the national humiliation which China suffered at the hands of the European powers in the nineteenth century. During that period these powers and Japan forced a series of cessions, and leases of territory on China, and secured special rights for their nationals in Chinese territory through the doctrine of extra-territoriality. Following the defeat of Germany and Japan in two world wars, and the voluntary relinquishment of other leased territories and extraterritorial rights by the other European powers and the United States, China recovered most of what she had lost. This left Hong Kong (with the tiny adjacent territory of Macao) as the sole surviving symbol in Chinese eyes of Western Imperialism.

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In a series of agreements beginning in 1927 and concluded by the Sino-British Treaty signed in Chungking in 1943, the British Government gave up its rights to extraterritoriality and to maintain concessions to China. To avoid alienating the British the Chinese did not insist on the return of Hong Kong at that time. In 1945 Chiang Kai-shek wished to have Chinese forces take the surrender of Japanese forces in Hong Kong. This was resisted by the British Government which correctly judged that this would lead inevitably to the rendition of Hong Kong. At that time Hong Kong had a population of 600,000 and was little more than a trading post devastated by war. The problems of rendition at that time would have been small compared to what they are forty years. later. That is history. But the consequence was that by insisting on a British return in 1945 the United Kingdom accepted an inescapable responsibility towards the population of this territory, which given the existence of the lease which expired in 1997, it could not discharge by the grant of independence.

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