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At the discussion which took place
last November we thought we had agreed upon
a compromise under which Hong Kong would
issue leases expiring within the term of
our lease from China but including an under-
taking to renew the grant for a further period
if it was within the power of the Hong Kong
Government to do so when the original lease
expired. It was understood that Sir C.
Clementi would get the Hong Kong lawyers to
concoct some formula to this effect which would
make the position plain without too obviously
advertising it.
It does not appear that any very
serious attempt has been made to produce such
a formula. Instead, as a result of local
discussions the Governor goes back to his
original proposal to grant 75-year leases.
I see no prospect of getting the Foreign Office
to agree to this and little hope that if the matter
is taken to the Cabinet we shall be successful.
Personally I can see no effective answer to
the Foreign Office arguments. In the present
state of Chinese feeling it is no use asking
for appreciation of practical business-like
methods. The mere suggestion that we were
seeking to exceed our powers in relation to
the New Territories could easily give rise to
a very considerable agitation. In any case, however business-like the present system of
alienation of land in Hong Kong may be, there
are certain aspects of it which would not
conciliate the Chinese. If, for example,
the