TNAG-0845-FCO40-1055-Visits-of-Foreign-and-Commonwealth-officials-to-Hong-Kong-1979 — Page 147

status

be that a change was a preliminary to a change in the actual

Hong Kong belongers. This could only be seen as a deliberate a empt by the British Government to distance Hong

Kong and its inhabitants from

Inhabitants from the United

the United Kingdom. This would

create wide and deeply held resentment and more materially

would be likely to create doubts about the Colony's future

in relation to the People's Republic of China with

unquantifiable but potentially far-reaching effects on business

confidence. In making their planning and investment decisions

the business community in Hong Kong must be able to assume that the present status of the Colony will be maintained for a considerable period of time; an otherwise inexplicable change

in nomenclature at the present moment would create suspicions

that the UK Government itself had doubts about the longer term

prospects. Such a loss

Loss of confidence at this juncture could

quickly lead to a drop in investment, with the prospects of a far-reaching economic stump which would directly damage

British interests as well as the interests of Hong Kong itself.

Hong Kong is second only to Japan as a market for British

exports in Asia outside the Middle East and British investment

in the Colony is substantial. The British Government is also

ultimately responsible for the well-being of the people of

Hong Kong and any prospect of economic recession, particularly

when the Colony is suffering from acute problems resulting

from the refugee influx, would be of direct concern to the

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Government in London itself.

2.

Any change would furthermore seriously affect proposed

changes in the arrangements relating to the lease of the

New Territories which are at present the subject of

extremely delicate exchanges with the Chinese Government in

Peking. The New Territories in Hong Kong, which make up

over 90 per cent of the Colony's total land area, were

leased, rather than ceded, by China to Britain in 1898 and

the lease runs out in June 1997. Land Leases in the New

Territories drawn up by the Hong Kong Government have alL

been written to end in 1997′ and unless arrangements can be

made to extend them the increasingly short span of the current

leases will soon begin to deter investors. Ministers there-

fore decided that the Chinese Government should be told of

our intention to convert current leases into leases of

indeterminate duration. This will involve legislation, the

/successful