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New Territories Lease
We are due to hold a meeting with Messrs McLaren and Samuel of the FCO to discuss the next step on the leases issue on Monday, 30 April. This note sets out the problems and considers alternative solutions.
What did Deng mean?
Deng Xiaoping had clearly been briefed to make reassuring remarks to maintain confidence in Hong Kong. He, and his officials, saw this in terms of maintaining the, confidence of investors.
What Deng said followed an existing pattern: Taiwan. The "special status" he envisaged for Hong Kong was the continuation of the existing economic and social system. He gave away nothing on political control although the trend of his remarks implied that he thought it more likely than not that the status quo would be maintained.
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On leases Deng did not immediately grasp what was involved. He also seemed to think initially that we were thinking about some form of joint statement. He was probably clearer, and more relaxed about the subject, at the end of the discussion. Nevertheless we cannot be certain how well Deng understood the problem, nor what the considered Chinese reaction will be. Unfortunately, on the record will be his comment that it would be better not to mention continuing British administration.
Implications of Deng's remarks
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Two problems arise from what Deng said: general and the specific. The general one is that Deng's remarks will now form the received truth in Party
· circles on Hong Kong. The Chinese believe that what he said was reassuring. Parts, or all of it will be said again. If expressed as the quintessence of the Chinese view of Hong Kong's future, what he said would, at present, be far from reassuring.
The more specific and immediate problem is whether and, if so Deng's remarks affect our plans for a draft Order in Council. What he said does not
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how,
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