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FUTURE OF HONG KONG AND LEASES IN THE NEW TERRITORIES
ESSENTIAL FACTS
The Problem
1.
The Lease on the New Territories is due to expire on
1 July 1997. Although the New Territories are only a part of
Hong Kong, the territory would not be viable without them. The
long-term problem is the status and administration of Hong Kong
after 1997. But there is also a shorter term problem.
Although
2. Leases by the Crown to individual investors in the New
Territories at present expire 3 days before 1 July 1997.
most investments in Hong Kong are amortised over short periods
(some of 5 years or less), it will not be long before some firms,
particularly those contemplating major infrastructure works,
object to the 1997 terminal date. Moreover, 15 years is a normal
term for mortgages in Hong Kong; financial bodies will be reluctant
to conclude loan agreements extending beyond the nominal lease
period. The 15-year period is also important because of the
guarantee by HMG of loans to Hong Kong for that term by the Asian
Development Bank (mainly for projects in the New Territories).
1982 could thus be a key year.
Governor's Visit to Peking
3. The Governor of Hong Kong visited China in March 1979. He
met Vice Premier Deng Xiaoping on 29 March 1979. The latter raised
the issue of the future of Hong Kong. He said that China had a
consistent position that sovereignty over Hong Kong lay with China.
But he acknowledged that Hong Kong has its own special status.
1997 was still 18 years away and discussions might be held before
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