TNAG-0849-FCO40-1059-Future-of-Hong-Kong-New-Territories-leases-1979 — Page 16

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ANY LEGAL OBSTACLE ON THE BRITISH SIDE TO THE GOVERNOR CONTINUING

TO ADMINISTER THE NEW TERRITORIES AFTER 1997 WOULD BE REMO’

BY AN ORDER IN COUNCIL. THE ORDER WOULD NOT REQUIRE AN AFFIRMATIVE

VOTE IN THE HOUSE OF COMMONS. THESE MOVES WOULD MAKE IT POSSIBLE

FOR BRITISH ADMINISTRATION TO CONTINUE BEYOND 1997 IF THE CHINESE

SO WISH. BUT THEY DO NOT CONTRADICT THE CHINESE POSITION ON HONG

KONG, NOR DO THEY CALL FOR ANY RESPONSE FROM THE CHINESE OR ANY

ACTION BY THEM. NEVERTHELESS, WE NEED TO KNOW THAT THE CHINESE ARE

NOT GOING TO GIVE A PUBLIC REDUFF BEFORE GOING AHEAD.

WITH THE AGREEMENT OF THE PREVIOUS GOVERNMENT, THE GOVERNOR TOOK

THE FIRST STEP IN TELLING THE CHINESE WHAT WE WERE THINGKING OF

DOING DURING HIS VISIT TO PEKING IN MARCH. HE DELIBERATELY PUT

THE MATTER IN GENERAL TERMS AND TREATED IT IN A LOW KEY. THE

INDICATIONS ARE THAT THE CHINESE MAY NOT HAVE FULLY UNDERSTOOD WHAT WE ARE INTENDING TO DO. I HAVE, THEREFORE, AGREED THAT WE SHOULD FOLLOW UP THE GOVERNOR'S EXPLORATORY MOVE BY TELLING THE

CHINESE IN MORE DETAIL WHAT WE PROPOSE TO DO. CLEARLY WE CANNOT GO

AHEAD WITH THE ORDER INCOUNCIL UNLESS WE ARE SATISFIED

THAT THE CHINESE HAVE UNDERSTOOD WHAT WE PROPOSE TO DO, HAVE HAD

TIME TO CONSIDER IT, AND TO OBJECT IF THEY WISH. THE AMBASSADOR

IN PEKING HOPES TO TAKE ACTION IN THE NEXT WEEK. THE CHINESE

REACTION TO THIS FURTHER APPROACH BY THE AMBASSADOR SHOULD MAKE

THIS CLEAR.

IF THE CHINESE DO NOT OBJECT TO WHAT IS PROPOSED, WE SHOULD LAY

THE ORDER IN SEPTEMBER SO THAT SOMETHING CAN BE SAID ABOUT

THE FUTURE OF THE LEASES IN THE GOVERNOR'S LEGISLATIVE STATEMENT

IN HONG KONG IN OCTOBER. IF THE CHINESE DO REACT UNFAVOURABLY,

OUR APPROACH WILL HAVE BEEN MADE IN PRIVATE AND NO HARM TO OUR

RELATIONS WILL HAVE BEEN DONE.

I SHALL KEEP YOU AND OUR COLLEAGUES IN OD, TO WHOM I AM COPYING

THIS MINUTE, INFORMED.

ENDS

FCO PLEASE PASS ALL

HUNT

FILES

HRAD, (b)

FED

PS

PS LPS

[PASSED AS REQUESTED]

PS/MR RIDLEY

PS MR BLAKER

PSIPUS

MR MURRAY MR RUSHFORD,

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NOIO DOWNING ST