TNAG-0937-FCO40-1156-Visits-of-Sir-Murray-MacLehose--Governor-of-Hong-Kong--to-th-1980 — Page 40

SECRET

THE FUTURE OF HONG KONG : ESSENTIAL FACTS

INDIVIDUAL LAND LEASES

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1. Most pressing issue individual leases of Crown land in New

All expire in 1997. Risk of loss of confidence as

Territories.

lease periods shorten. Normal mortgage period 15 years, so 1982

critical year.

2. In July 1979, Chinese rejected our proposal for leases without

terminal date, posibly because this was linked to continuing

British administration.

Other possible solutions for fixed-term

or periodic leases beyond 1997 would probably require new legis-

lation in Hong Kong.

3. HM Ambassador in Peking considers that there would be advantage

in seeking Chinese views on these options soon, including the question

of possible legislation.

4.

Governor favours leaving immediate running to Chinese. Contacts

through intermediaries in Hong Kong with Communist connections

suggest that solution may lie in leases being granted to Peking-

controlled commercial organisations for period beyond 1997.

These may develop in next few months. But if no progress by

Summer 1981 will have to take initiative ourselves.

SECRETARY OF STATE'S VISIT TO CHINA IN 1981

5. New Territories land leases discussed in general terms with

Huang Hua. in October. Huang reiterated Deng's statement that

China would do nothing that would adversely affect investors'

interests.. Tactics for visit to China will depend on developments

in the meantime, in particular progress on individual cases.

/LONG-TERM FUTURE

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