TNAG-0848-FCO40-1058-Future-of-Hong-Kong-New-Territories-leases-1979 — Page 79

SECRET

HONG KONG IN THE 1980s

INTRODUCTION

1.

now be Her Itam

al

was

minated

عيد..

The Churies have been put on novice that the expiry of the

New Terntories Leave i

he

egui

to deter new

1997 wit investment

tairly soon unless corrective action

is taken

→

and

મૈં

which is

about

The last 12 months have seen dramatic changes in Chinese attitudes towards the outside world, and towards Western countries in particular. There have been no less striking developments in the relationship between China and Hong Kong The

The situation is avy rinne fince 1949. What could be come

dia lozue still evolving, but it has already reached the point where Ministers

The future of Hong Kong

during the recent Witch of the Govenor

động trong have agreed that the Chinese should be sounded out on the practical

to Peking. problems which the expiry of the New Territories Lease in 1997 will

when this create for Hong Kong in the 1980s. We cannot be sure how the Chinese will asset es where subsequent discussion (which could take

rsaeter mortko) will lead. But there seems a reasonable possibility that they Chiasse will agree to see satisfactory arrangement. Barring a complete reversal of the policies of the present Chinese leadership, the continuation of British rule in Hong Kong through the 1980s should then be assured. It is possible that the status quo could be maintained for some considerable time after that, but we cannot realistically look further ahead than the next ten years.

2.

Against this background, this paper considers British interests in Hong Kong, compares them with those of the Chinese, and sets out some of the issues which are likely to arise over the years and some of the considerations which will affect the formulation of British policy.

BRITISH INTERESTS

3. There are advantages and disadvantages for Britain in the Hong Kong connection. The advantages are now perhaps more apparent than they were a few years ago. In the post-Mao era Hong Kong has proved a very positive factor in the development of relations between Britain and China (see paragraph 6 below). Hong Kong is in itself an increasingly important market for British goods. some lean years British exports are picking up, in particular, contracts for the supply of capital goods worth some £564 million have been won by British firms since 1976. In the civil aviation

1

SECRET

After