TNAG-0943-FCO40-1162-Future-of-Hong-Kong-1980 — Page 31

SECRET

SECRET

FM PEKING 1707172 JUL 80

RECEIVER

TO PRIORITY FCO

TELEG AM NUMBER 472 OF 17 JULY 1980

некон

22 !!! 1980

...

"

AND TO PRIORITY HONG KONG (FOR ACTING GOVERNOE).

DEX

FOR DONALD, AUSS

GH

་ ་བ་

!

Pow 1/8 RW 191

THE GOVERNOR'S LETTER OF 7 JULY TO DONALD AND DR WILSON'S

LETTER OF 10 JULY TO CLIFT:

HONG KONG

LEASES AND THE FUTURE OF

1. WE AGREE WITH MUCH OF THE ANALYSIS IN PARAGRAPHS 2-9

OF THE GOVERNOR'S LETTER. IF THE CHINESE ARE THINKING THAT

SYMBIOSIS BETWEEN GUANGDONG AND HONG KONG WILL SOMEHOW SOLVE

THE PROBLEM, THEY UNDERESTIMATE THE COMPLICATIONS AND MUST BE GIVEN TIME TO FIND THIS OUT FROM OTHERS THAN OURSELVES.

WE TOO HAVE POINTED TO THE CONSTRAINTS AND COMPULSIONS UNDER

WHICH THEY OPERATE. TO FORCE THEM INTO PREMATURE DECISIONS ON THE FUTURE WOULD BE WRONG. BUT GU MU DID LINK THE STATUS OF THE NEW TERRITORIES (THE LEASE) AND A NEXT STEP** (WHICH FOR US IS THE QUESTION OF LAND LEASES), I DO NOT THINK THAT

WE CAN ASSUME THAT BECAUSE WE DO NOT KNOW WHAT LAY BEHIND

HIS WORDS WE CAN ALTOGETHER DISREGARD THE LINKAGE. SOME

DIALOGUE ON LAND LEASES IS INEVITABLE, AND IT MUST TAKE

PLACE IN THE MORE OR LESS EXPLICIT RECOGNITION THAT THE

SOLUTION MUST BE COMPATIBLE WITH A LONG TERM SOLUTION ACCEPTABLE

TO THE CHINESE. IT SHOULD ALLOW US TO INFLUENCE THE DEVELOPMENT

OF THEIR LONGER TERM IDEAS AND HELP TO AVOID THE EMERGENCE

OF POLICIES ALTOGETHER IMPRACTICABLE OR INIMICAL TO OUR

INTERESTS.

2. ON LAND LEASES, THE CHINESE MAY INDICATE THE SOLUTION THEY WANT AND CONDITIONS THEY WISH TO ATTACH TO IT. THEY MIGHT AT WORST SEEK AN OVERSIGHT OF ANY ISSUE OF LEASES RUNNING BEYONG 1997 TO PARTIES OTHER THAN THEIR NOMINEES. ALTERNATIVES (1) - (IV) IN WILSON'S LETTER THUS REPRESENT ONLY ONE SIDE OF THE DISCUSSION. WE AGREE, HOWEVER, THAT ANY EXPLICIT MENTION OF 1997 WOULD BE UNDESIRABLE, AND THAT, AS BETWEEN (1) AND (11) IN PARAGRAPH 3, (1) HAS THE MERIT OF SIMPLICITY AND CONFIDENCE BUILDING. BUT WE DO NOT SEE WHY LEGISLATION

FROM THE OUTSET IS EXCLUDED. ALTHOUGH WE HAVE HAD SOME HINTS THAT THE CHINESE WOULD PREFER US TO ACT INFORMALLY

(WHICH IS AFTER ALL THE BEST WAY OF ENSURING THAT THEIR OPTIONS REMAIN OPEN), WE DO NOT KNOW FOR SURE WHETHER THE CHINESE REJECTED OUR EARLIER APPROACH BECAUSE THEY DISLIKED THE LEGISLATIVE ASPECTS, THE POWERS PROVIDING FOR THE CONTINUANCE OF THE GOVERNOR'S RULE, OR SIMPLY BECAUSE THEY THOUGHT

IT PREMATURE. IT IS ARGUABLE THAT IT WOULD STILL BE BETTER

TO LEGISLATE NOW RATHER THAN WHEN WE FACED A CHALLENGE

IN THE COURTS. SUCH A CHALLENGE MIGHT ALSO COME AT AN

SECRET

/AWRWARD