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Mao; and that there may be a struggle for power between the two with consequent disturbances in China similar to the Cultural Revolution which spilled over into the Colony in 1967. The pragmatic arguments would seem likely to weaken over the years: but even so the Chinese might be persuaded of the advantage of
a continuing separate status for Hong Kong as an outlet for her exports and centre for her invisible trade; and of the disadvantage of any attempt quickly to absorb a reluctant population accustomed to a different way of life to that on the mainland. On balance a sudden change of attitude by China seems unlikely but the long term trend is probably unfavourable to the prospect of Hong Kong's continued existence as a Colony, even if this is what we ourselves
would want.
11. A major consideration is the running out of the lease on the New Territories in 1997. On our interpretation of international law, there is a distinction between the status of the New Territories held on a 99 year lease under the Second Convention of Peking (1898), and that of the Island of Victoria, the southern tip of the Kowloon peninsula and Stonecutters Island, ceded in perpetuity by the 1842 Treaty of Nanking and the 1860 Convention of Peking. However, the logic of the Chinese position that all three treaties were "unequal" and hence invalid makes
the distinction more theoretical than real; and in fact Hong Kong Government policy in such matters as new towns is based on the recognition that the Colony is indeed a single entity (although Crown leases to private individuals in the New Territories are granted for periods of less than the remaining portion of the 1997 lease).
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12.
The existence of a termination date of the lease and the Chinese attitude to all three treaties produces a paradoxical situation. HMG, and foreign investors in the Colony, must base policy on the assumption that 1997 could mark a watershed in Hong Kong's affairs. The Chinese appear to regard us, but not necessarily themselves, as bound by the New Territories lease or by the other treaties relating to Hong Kong. Chinese policy can therefore be based on the proposition that repossession of all three areas of Hong Kong will take place at any time suitable to
/China's
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