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SECRET
MR BLAKER'S MEETING WITH SIR MURRAY MACLEHOSE:
11.30 AM, FRIDAY, 11 JANUARY
BRIEF NO 3: NEW TERRITORIES LEASES
1.
The time will soon come when the approaching end of the Lease
in 1997 must begin to affect business confidence. The Chinese
Government are aware of this and have been at pains to reassure local
and foreign investors that whatever happens they need have no fear for
their investments. This point was made by Deng Xiaoping to the Governor last March and again by Premier Hua Guofeng at his press conference
before leaving for his visit to Western Europe in October.
2. General assurances of this kind have had a helpful effect. But
they are not sufficient to resolve the legal and practical problems
which arise from the fact that the land leases in the New Territories
are all due to end in 1997.
3. After discussions with the Governor and HM Ambassador, Peking,
we decided early last year that the best solution was to issue future
leases in the New Territories without a fixed term; to convert existing
leases into indeterminate leases; and to take legal steps that would
make it possible for British administration to continue after 1997 should
the Chinese (and, of course, the British) Government so wish.
4.
However, when these proposals were put to the Chinese, they
rejected them as "unnecessary and inappropriate".
We therefore decided
not to pursue them, though the Secretary of State reiterated our concern
to Premier Hua and Foreign Minister Huang Hua during their visit to
London in November.
Premier Hua indicated that the Chinese reply had
already been given but agreed that we should keep in touch over the
problem.
SECRET
15.
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