TNAG-0848-FCO40-1058-Future-of-Hong-Kong-New-Territories-leases-1979 — Page 94

SECRET

THIS DOCUMENT IS THE PROPERTY OF HER BRITANNIC MAJESTY'S GOVERNMENT

DOP(79) 15

COPY NO

22 March 1979

CABINET

DEFENCE AND OVERSEA POLICY COMMITTEE

HONG KONG: NEW TERRITORIES LEASES

Memorandum by the Foreign and Commonwealth Secretary

1.

The bulk of the territory of Hong Kong, known as the New Territories, was leased from China in 1898 for a period of 99 years. The present Chinese Government have never acknowledged the nineteenth century treaties relating to Hong Kong and regard the entire Colony as Chinese territory occupied by Britain. Judging by their present attitude, they will not necessarily expect the New Territories to be returned to China when the lease expires in 1997. But the approach of that date creates problems for the administration of Hong Kong in the meantime.

2. One important problem with far reaching implications concerns property leases. The many thousands of leases in the New Territories end in 1997. Unless some action is taken to remove the significance of this deadline, the steadily shortening span of existing leases, and the inability of the Hong Kong Government to grant new ones extending beyond 1997, will fairly soon begin to deter new investment and undermine confidence in the future of

Hong Kong

3.

No confidence-building action can be taken without Chinese concurrence. But there seems a good chance that they will be

1

SECRET