TNAG-0848-FCO40-1058-Future-of-Hong-Kong-New-Territories-leases-1979 — Page 92

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Mr Cortazzi

HONG KONG: NEW TERRITORIES LEASES

HACK OWoll.

BY DO. ST 2 9 MAR 1979

No J29.3

1. The Secretary of State circulated a paper about the New Territories leases to his DOP colleagues on 22 March. The Prime

has Minister/endorsed the Secretary of State's proposal but has made two comments, namely that DOP should be informed of any Chinese reactions to the Governor's approach on this subject, and have the opportunity to consider them, before the Secretary of State's depart- ure for China; and that special attention will need to be given

to the public presentation of any change in policy on New Territories leases (Mr Cartledge's letter to Mr Wall of 26 March).

2. As regards the first point, FCO telegram No 13 Saving to Hong Kong ended by asking the Governor to send a full report by telegram at the end of the Peking part of his visit, and I have reinforced this request in a telephone conversation with the Political Adviser. But it would do no harm to make the point again. The Peking part of the Governor's visit ends on the morning of Friday, 30 March. The latest version of the programme includes talks with the Governor's host, the Minister for Foreign Trade on 27 March; with a "senior member" of the Ministry of Foreign Affairs on 28 March; and with a "State leader" (Deng Xiaoping has been mentioned informally), on 29 March. The Governor will no doubt delay his report until the conclusion of his talks, but we should get a telegram some time on Friday, 30 March. This will fit in with the timetable for DOP consideration of the subject set out in

paragraph 2 of Mr Cartledge's letter.

3. On the Prime Minister's second point, the public presentation of a change in policy on New Territories leases will certainly need to be discussed with the Chinese if we get to that stage. The ideas which the Governor has been authorised to put forward are designed to be consistent with the Chinese position on the future of Hong Kong and have the advantage that no specific Chinese action is required: everything would be done by the British and Hong Kong Governments. But we and the Hong Kong Government would need to be able to say publicly that the Chinese had been informed of the proposed action and had raised no objection. However, we are only

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