TNAG-0753-FCO40-957-Future-of-Hong-Kong-1978 — Page 93

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INMEDIA This

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TO IMMEDIATE FCO TELNO 612 OF 2.10.78

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AND TO IMMEDIATE HONG KONG,

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MCLAREN'S LETTER HKK 040/1 OF 8 SEPTEMBER (RECEIVED TODAY).

N. T. LEASES,

1.w WE AGREE THAT WE SHOULD AIM FOR A SOLUTION WHICH RESULTS IN (AND NEEDS) NO MORE THAN CPG ACQUIESCENCE IN THE PARTICULAR STEPS

TAKEN BY HMG AND/OR THE H.K. GOVERNMENT. WE ALSO AGREE THAT

THE CHINESS ARE UNLIKELY TO ACCEPT AT THIS STACE ANY SOLUTION

TANTAMOUNT TO A UNILATERAL CHANGE IN HONG KONG'S STATUS PARTICULARLY IF IT CLEARLY IMPLIES THAT THE U.K. WILL HAVE TURISDICTION AFTER 1997. WE SHOULD THEREFORE SEEK PROGRESSIVELY TO OBLITERATE THE SIGNIFICANCE OF 1997, AS THE GOVERNOR SUGGESTS.

2. ANY FIXED TERM SOLUTION, APART FROM PROBABLY BEING UNACCEPTABLE TO THE CPG, MUST SIMPLY POSTPONE THE PROBLEM, THIS WOULD SEEM TO ELIMINATE (A) AND (B), WHILE (C), THOUGH POSSIBLE, MERELY UNDERLINES OUR DOUBTS AS TO THE FUTURE. OPTION (E) HAS THE DIS-

ADVANTAGE OF DRAWING ATTENTION TO THE DATE 23 JUNE 1997. WE REMAIN ATTRACTED BY THE UNDETERMINED SOLUTION, OF WHICH (D) IS A VARIANT.

3. WE ARE NOT IN A POSITION TO ASSESS THE POINTS RAISED IN PARA

OF THE HONG KONG TELNO.137. BUT WE WONDER IF THE IDEA OF A PERPETUAL LEASE IS REALLY A NOM STARTER (PARA 4 OF MCLAREN'S

LETTER). WOULD IT SE POSSIBLE SIMPLY TO GRANT FREEHOLDS ?

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LEGAL Aby: MA MURCAY

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