TNAG-0850-FCO40-1060-Future-of-Hong-Kong-New-Territories-leases-1979 — Page 176

Mr Stratton

Parliamentary Unit

CONFIDENTIAL

HKK. RECEIVED IN REGISTRY NO.

6 AUG 1979

DESK OFFICER

165

PARLIAMENTARY QUESTION: HONG KONG: MR ROBERT PARRY MP

1. I submit a draft reply to the attached Parliamentary

Question about investors' confidence in Hong Kong put down

Liverpool, Scotland Exchange)

by Mr Robert Parry MP (Labour

for Written Answer on 26 July.

(There is clearly a typing

error in the Question, which should refer to "post-1997" leases").

2.

Mr Parry's Question comes uncomfortably close to the truth.

While it would be an exaggeration to speak of a "crisis in

investors' confidence", the inability of the Hong Kong Government

to issue property leases in the New Territories extending beyond

1997 is likely to cause increasing problems as time goes on,

A detailed and we are in fact planning to take remedial action.

explanation of what we have in mind has been given to the Chinese

by HM Ambassador in Peking following an earlier approach by the

Governor during his visit to China.

Providing the Chinese raise

-

no objection and this cannot be taken for granted the present

intention is to introduce legislation in Hong Kong and (by means

of an Order in Council) in the UK in the Autumn.

3.

While the need for action of some kind to deal with the

leases question is a matter fairly frequently aired in business

CONFIDENTIAL

/circles