CONFIDENTIAL

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Government on the 'Administrative Boundaries' of Hong Kong.

have always reserved the right to return to the JLG once

agreement has been reached with Guangdong.

3. The agreement which seems likely to be reached

We

with the Guangdong side will involve the exchange of large areas

of sea and relatively small areas of land resulting from a

straightening of the Shenzhen River. Legal Advice is that

yielding sovereignty over the maritime areas would the laying

before parliament of an order under the Hong Kong Act 1985 using the negative resolution procedure. Legislation would

also be required in Hong Kong, but such legislation would be

controversial as HKG would be seen to be giving away land with

no guarantee from the Chinese side that the agreement would be implemented.

4. Hong Kong prefer (their telno 456 attached) for agreement

to be marked by an MOU (which would not be legally binding ) and make no changes to the Laws of Hong Kong but in practice

not exercise jurisdiction in the territory handed over. We and

Legal Advisers are not attracted to this idea. It would mean

that the Hong Kong security forces would be unable to enforce

the Laws of Hong Kong in those parts of the territory North of

the new line of the river although legally responsible to do

so. Similarly they would have no legal authority to exercise

jurisdiction in those parts of Shenzhen which would lie south

of the river although they would need to do so in combatting

Illegal Immigration.

5. If we reach an agreement with the Chinese side on the new

boundaries in the form of an MOU, there is nothing to stop the Chinese from choosing different boundaries for the SAR eg by

including Shenzhen into the SAR. But it would give the

Guangdong side what it wants, ie a realigned border at which

permits river straightening up to the town of Shenzhen, half

exp8.sub/BOUNDARIES

CONFIDENTIAL

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