TNAG-0943-FCO40-1162-Future-of-Hong-Kong-1980 — Page 319

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MEETING BETWEEN THE MINISTER OF STATE AND THE GOVERNOR OF HONG KONG: 11 JANUARY 1980

Present:

Mr Blaker

Mr McLaren

Mr Clift

Mr Munro

Sir Murray MacLehose

1

LAND LEASES IN THE NEW TERRITORIES AND THE FUTURE OF HONG KONG

1.

Mr Blaker asked how the Governor saw the way ahead now that the Chinese had rejected our proposal for adjust- ments to the terminal date of land leases in the New Terri- tories. The Governor said that we had probably moved too quickly in making these proposals. It would now be wrong to push the Chinese too hard. The next step should be for the Ambassador in Peking and himself to consider alternative ways in which we might ask the Chinese to help. Mr Blaker agreed.

Subsequent discussion with Mr Cortazzi

2.

In a later discussion on the subject with Mr Cortazzi over lunch the Governor stressed that any new approach to the Chinese must be carefully prepared. The practical problem was that while for urban property speculators a return on money could be anticipated in as little as a year with a rather longer period for industrial undertakings - for projects involving the exploitation of large parcels of land in the New Territories, eg railways return on investment was slower. We would need to consider what should be said if the Prime Minister or Foreign Secretary visited Peking in the second half of the year. Meanwhile, we should continue to remind the Chinese on suitable occasions that the problem existed. He would want to consider with the Ambassador in Peking whether there were ways of getting the Chinese to build upon Deng Xiaoping's assurance so as to give more specific confidence to investors.

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