TNAG-0848-FCO40-1058-Future-of-Hong-Kong-New-Territories-leases-1979 — Page 70

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2. AFTER INITIAL REMARKS ABOUT THE GOOD COOPERATION

BETWEEN HONG KONG AND CHINA AND THE NEED FOR

CONTINUING INVESTMENT IN NEW LAND IN THE NEW TERRITORIES, THE GOVERNOR REFERRED TO THE LEASES ISSUE. HEBWAID THAT THE LONG TERM FUTURE WAS A MATTER BETWEEN THE CPG AND HIG, THERE WAS HOWEVER THE IMMEDIATE PROBLEM OF

WAIT.

DIVIDUAL LEASES IN THE NEW TERRITORIES, WHICH WOULD NOT AS THE LENGTH OF THESE LEASES SHORTENED INVESTMENT

OF THE RIGHT TYPE WOULD BE DETERRED. THE MATTER WAS NOT

RELEVANT TO CHINA'S UNDERLYING POSITION ON HONG KONG,

BUT INCREASED HIS OWN PROBLEMS. IF THIS QUESTION COULD BE

SOLVED THEN INVESTMENT COULD BE ATTRACTED WHICH WOULD KEEP

HONG KONG KONG COMPETITIVE IN WORLD MARKETS, SUCH A

SOLUTION WOULD BE OF BENEFIT TO THE UK AND CHINA,

Зе AFTER A DISCUSSION OF POINTS ARISING ON IMMIGRATION

AND INVESTMENT, WHICH WE WILL BE REPORTING SEPARATELY, DENG

REVERTED TO THE LEASES ISSUE AND ASKED THE GOVERNOR

TO TELL INVESTORS TO ''PUT THEIR HEARTS AT EASE''.

THE GOVERNOR REPLIED THAT THE PROBLEM COULD NOT BE GOT OVER

BY GENERAL ASSURANCES. HIS PROPOSAL WAS TO REPLACE A SYSTEM

OF LEASES VALID, UNTIL JUNE 1997 BY LEASES WHICH WERE VALID

AS LONG AS BRITAIN ADMINISTERED THE NEW TERRITORIES.

WOULD REMOVE THE QUESTION OF THE DATE.

lien

THIS

DENG'S IMMEDIATE REACTION WAS THAT ANY WORDING SHOULD AVOID MENTION OF BRITISH ADMINISTRATION, IN VIEW OF THE CHINESE POSITION, HE COULD NOT CONFIRM THAT THE POLITICAL SITUATION WOULD REMAIN UNCHANGED, BUT APPEARED TO BE REASSURED BY THE GOVERNOR SAYING THAT HIS PROPOSAL DID NOT AFFECT THE CHINESE POSITION. THE GOVERNOR REPEATED THE CONCERN OF INVESTORS ABOUT THE DATE OF LEASES. DENG REAFFIRMED THE CHINESE POSITION. HE SAID THAT, "' TO PUIT CVORE PLAINLY**, IN THIS CENTURY AND EVEN AT THE BEGINNING OF THE NEXT CENTURY HONG KONG WOULD STILL BE CONTINUING WITH ITS CAPITALIST SYSTEM WHILE CHINA WAS GETTING AHEAD WITH ITS. SOCIALIST SYSTEM. THERE WERE TWO POSSIBLE SOLUTIONS IN 1997, TO TAKE OVER HONG KONG OR TO RECOGNISE PRESENT REALITIES.Malabohydayken NEITHER SOLUTION WOULD AFFECT INVESTMENT. AFTER THE GOVERNOR HAD MADE CLEAR THAT IS PRC. COAL DID NOT AFFECT THE

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/CHINESE