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Hong Kong could not be viable separated from the main industrial areas in the New Territories; the frontier in Kowloon would be impossible to control; all the sea and air approaches could be claimed as under de iure Chinese control as well as being under their de facto control. Continued retention of these areas would make no sense, either economically or politically.
Timing of Negotiations
69. The timing of an offor to negotiate our withdrawal would clearly need careful judgment. A number of the factors to be taken into account have already been mentioned notably, China's interest in reaching a solution and the possibility of handing Hong Kong over with its trade outlets to the Western world unimpaired (in itself greatly dependent on American willingness to co-operate). The present climate is not favourable in any of these important respects. At this point of time we can only indicate the broad limits of time which, in our opinion, may be available to us to make such an offer.
and there
70. Genuine negotiations could not be mounted in present conditions in China and we cannot foresee when these may be more favourable. If we sought now to hand the Colony back we could not do so with any hope of discharging our responsibilities towards its people or of getting any of them out; could be serious damage to relations with our allies. end of the time scale is determined by the strong probability that public confidence in the Colony's future will start to slip
it could become a and the economy to rundown in the 1980s;
The other
serious liability to us and it would lose its value to China. All this points to an initiative on our part taken not later than the early 1980s and as soon as there emerges in China a regime with which we might be able to do business and which all our allies would be prepared to countenance - avoiding, however, any
time when:
or
(a) the Hong Kong excnomy is showing weakness; (b) we are under any form of Chinese pressure either from
within or without the Colony.
71.
There are also factors indicating that we should take the
The first opportunity that favourable circumstances offer. growth rate in the Hong Kong economy necessary to provide for a
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