CONFIDENTIAL

104A

Mr Hum

Hyẩm

012/4

-3 DEC 1992

FROM: P F Ricketts

Hong Kong Department

DATE: 1 December 1992

cc: Mr Crowe

Mr Miles

Mr Bickham, Special Adv.

Mr Cornish, News Dept

Mr Davies, FED

Miniter

Should we

Mr Broadbent, Econ. Adv.

unsrive

As

3112.

PS/Mr Goodlad

Private Secretary

Chem 7/12

artile abome ite

سنتكة

Chice beharia

its legal basis?

HONG KONG : THE BUSINESS COMMUNITY

Mr Hall, PEP DTI) Personal

Mr Love, OT2, DTI)

1.

We

It may be worth taking stock of the latest developments.

also have the first anecdotal evidence that the Chinese are now

making vague threats of retaliation against major British

businesses involved in China.

A 2. The latest salvo from Peking has been the statement from the

Hong Kong and Macau Affairs Office on 30 November saying that

except for the provision on land leases set out in Annex III of the Joint Declaration, other contracts, leases and agreements

signed and ratified by the Hong Kong British Government which

are not approved by the Chinese side, will be invalid after 30

June 1997.

B 3. In response, we and HKG issued a statement the same day. We

underlined that the Joint Declaration and the Basic Law make

clear that after 1997 the laws previously in force in Hong Kong,

which include the law of contract, will be maintained and that

contracts which are valid under Hong Kong's existing laws will

continue to be valid, provided that they do not contravene the Basic Law. We have also agreed with Hong Kong some

con.frn.ADM

SLM

CONFIDENTIAL

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