CONFIDENTIAL
5. HONG KONG/CHINESE RELATIONS AND ANGLO/CHINESE RELATIONS OVER
HONG KONG
The Future of Hong Kong and the New Territories Leases
5.1 A paper on British policy towards Hong Kong in the 1980s is currently being drafted in the department, the outline of which has been approved by the PUS and Lord Goronwy-Roberts. In the meantime we have been considering separately the problem of leases in the New Territories after 1997, and are tending towards the conclusion that the only practicable procedure is to seek Chinese acquiescence to the Governor's granting leases for an indeterminate length of time. To grant them for a fixed term would probably be unacceptable to the Chinese. A draft Order-in-Council has been drawn up by Mr Rushford and is being considered by the Governor and
HM Ambassador, Peking, at present. It would enable the Governor to grant leases "for so long as the Crown shall occupy the New
Territories".
Water Supply
5.2 An agreement signed by the Hong Kong and Canton authorities provides for increases in the water supply over the next four years from the 1977/78 level of 136 million cubic metres to 182 million cubic metres in 1982. Significantly, the Chinese have agreed to modify the necessary period of notice for altering the agreement: where formerly an inadequate period of 12 months was written into the agreement, it is now agreed that any revision shall be arranged through consultation between the two parties. The Chinese have also indicated their readiness in due course to discuss Hong Kong's longer
term water requirements.
Hong Kong/Canton Ferry
5.3
Another indication of improving Hong Kong/China relations is the Hong Kong/Canton hoverferry service which started on 17 November. It is also a reflection of China's interest in expanding tourism.
CONFIDENTIAL
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