TNAG-0902-FCO40-1112-Implications-for-Hong-Kong-of-changes-in-British-nationality-1979 — Page 149

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indeterminate duration. This will involve legislation, the successful implementation of which will depend upon at the least tacit acquiescence on the part of the Chinese Government. Although the Chinese have stated that they regard the whole of Hong Kong as Chinese territory temporarily under British administration, including the New Territories, which wilL

to China "when the time is ripe", they made clear to the Governor during his visit to China in March that they were content for the present arrangements to continue de facto for some appreciable time to come. They see Hong Kong as playing an indispensable part in the Chinese Government's new modernisation programmes; and they accept that it would be unable to make such a contribution unless Hong Kong's political, economic and commercial syster 1s maintained in its present form. The Chinese concern for the stability and prosperity of Hong Kong in this respect is thus very close to that of the British Government.

Nevertheless the Chinese are still obviously puzzled and suspicious about what we intend to do. They pay indicate their lacit acceptance in time for the Governor to announce arrangerents for the replacement of the present New Territory leases by leases of indeterminate durations when he addresses the Legislative Council in October this year. If the Chinese do not by then Indicate their acceptance of this arrangement eny announcement would still have to be made as soon thereafter as could be

arranged, and still with Chinese concurrence: we cannot proceed without it. We cannot rule out that a further protracted and very tectful effort may be needed to get the Chinese to accept our proposed arrangements for the New Territories. Our chances of

Kaking the arrangements stick would be rede much acre difficult if the Chinese concluded from promulgation of a new status for Hong Fong citizens that we intended other changes in Hong Kong's Long term future. Given the importance China attaches to Hong Kong's contribution to their modernisation plans any deliberate act by RNG which appeared to put the stability and prosperity of the Territory at risk would in turn have far-reaching effects on the

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