SECRET
15.
of 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.
14.
A major consideration is the running out of
the lease on the New Territories in 1997. On our inter-
pretation 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
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