CO537-2187 — Page 143

16.

I consider therefore that if the Chinese

seek the discussions contemplated in 1943 concerning

the leased areas, we should first of all make it

a condition prior to the opening of the discussions,

that the discussions should be confined to the

leased territories, and that we should also try to

get the Chinese to agree to recognise that any

arrangement that is reached as the result of those

discussions in respect of the leased territory

should be regarded as the final settlement of the

so-called Hong Kong question. We should then be

ready to discuss the New Territories lease on the

basis of conducting a joint review of it in the

light of the changes which have occurred since it

was first made and present-day circumstances and

conditions. On this basis, we might be able to

come to some arrangement which would be acceptable

to both sides, and, as a maximum, we should be

prepared to offer to agree to the premature

termination of the lease within a reasonable period

on the conditions suggested in Annex II, which would

meet our needs and difficulties, referred to in

sub-paragraphs (c), (d) and (e) of the preceding

paragraph.

17. To summarise, my conclusions are:-

(a) that a reassuring statement concerning our

intention to remain in Hong Kong should be made

at the earliest convenient opportunity

(paragraph 13):

(b) that if the Chinese seek the discussions

contemplated in 1943, we should adopt the plan

outlined in the foregoing paragraph of this

memorandum, and should be prepared, if necessary

Aurender and as a maximum, to agree to the termination of

the lease of the New Territories on the

conditions