TNAG-0229-FCO40-265-Long-term-study-of-future-of-Hong-Kong-1970 — Page 18

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4. The options which appear open to us, though events cannot be said to lie fully within our control, are broadly as follows:

15.

(a) do nothing, either on the assumption that

(b)

the Chinese will be prepared to permit the present situation to persist unaltered after 1997, or simply because no other course of action seems feasible;

prepare a voluntary and negotiated with-

Irom the whole Colmy)

drawal as soon as this can be arranged;

(c) negotiate with the Chinese at the earliest

possible moment with a view to

(i)

organising an orderly British withdrawal in 1997;

(ii) maintaining the Crown Colony post-1997

on the assumption that the Chinese

might permit the retention of the New Territories under the present

lease or on newly negotiated terms.

Before deciding which of these options may be

obtainable there are certain facts to be stated:

(a) There seems no likelihood of any negotiation

with the Chinese being feasible during the

life time of Mao Tse-tung; even afterwards

it may not be possible.

(6)

The nearer we approach to 1997 the greater

is the danger of loss of confidence in Hong Kong. This could not only result in the breakdown of the administration, but

will certainly mean that investment will

fall off and the industrial machine will

run down. The result, relatively quickly, would be that Hong Kong would become a financial liability to H.M.G. By the

middle 1970s certain decisions will have to

be taken, for example on electricity and telephone franchises, which will expose H.M.G.'s way of thinking.

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