TNAG-0849-FCO40-1059-Future-of-Hong-Kong-New-Territories-leases-1979 — Page 28

Registry No.

SECURITY CLASSIFICATION

Top Secret,

Secret.

Confidential.

Restricted.

Unclassified.

PRIVACY MARKING

SECRET

DRAFT

SPEAKING NOTE

To:-

Type 1 +

From

Telephone No. Ext.

Department

DSR 11

In Confidence]

NEW TERRITORIES LEASES

DRAFT SPEAKING NOTE FOR USE WITH CHINESE FOREIGN MINI STRY

1. When Vice Premier Deng Xiaoping saw the Governor on

30 March, the Vice Premier spoke about the future of Hong

Kong, the part it could play in the modernisation programmes,

and the need to maintain business confidence and investment.

He said that he regarded Hong Kong as part of China and that

one day China would wish to make political changes. But he

could not say whether this would be before 1997 or even as

late as the next century. However, whatever happened special

arrangements would be made to maintain living standards and

guarantee investment. He therefore formally invited the

Governor to tell investors in Hong Kong to put their hearts

at ease. The Governor passed on this message when he

returned to Hong Kong. This had a good effect. But as the

Governor explained to the Vice Premier, there is a short-term

problem about land leases which cannot be dealt with by

general assurances of this kind, helpful though they are.

2. The problem is that, at present, British law requires

all individual leases for land in the New Territories to end

in 1997. The Hong Kong Government is prohibited from

granting leases extending beyond that date. This is

SECRET

/different

Dd 0532000 800M 5/78 HMSO Bracknell