TNAG-0848-FCO40-1058-Future-of-Hong-Kong-New-Territories-leases-1979 — Page 27

PM/79/39

PRIME MINISTER

SECRET

нкад

hard

HkKkovely B. Lord Coron y -Potents

Никола

DOBRY NO. SA 12 APR 1979

INDEX

No

PA

REC

Mur extaza,

Mr

MURRAY

J27.0

1

"Mr Stephon

1.

Hong Kong: New Territories Leases

In my memorandum to DOP (DOP(79)15) of 22 March I proposed that during his visit to Peking the Governor of Hong Kong should sound out the Chinese on the problem of property leases in the New Territories.

2.

Our Ambassador in Peking has now reported on the conversations which took place on 29 March between the Governor and Deng Xiaoping and other Chinese leaders. Deng himself raised

the issue of the future of Hong Kong. While reaffirming the Chinese view that Hong Kong is part of China, he said at one point that even at the beginning of the next century Hong Kong would still be continuing with its capitalist system and that, whether or not China took over Hong Kong in 1997, investment would not be affected. Sir Murray MacLehose said that the long-term future of Hong Kong was a matter for the Chinese and British Governments. But the

question of New Territories leases was one which could not be dealt with by general assurances and would not wait. He therefore proposed to replace the present system of leases valid until 1997 by leases valid as long as Britain administered the New Territories. Deng evidently found it difficult to grasp the English legal concepts involved but appeared to accept that all that was proposed was the removal of the terminal date in leases, and that

this required no Chinese action and did not conflict with the

Chinese position. The Governor subsequently explained his ideas to the Chinese Foreign Minister, Huang Hua, and to Liao Chengzhih (who has special responsibility for Hong Kong and Macao). None of the Chinese leaders specifically endorsed the proposal, but they did not reject it.

3. The advice of the Governor and the Ambassador is that we

should now let matters rest for a while. I am sure that this is

right. Our ideas have been put to the Chinese and they must be

given reasonable time to absorb and consider them.

some further reaction during the coming weeks. If not, we will

They may provide

SECRET

/ consider