TNAG-0943-FCO40-1162-Future-of-Hong-Kong-1980 — Page 36

CONFIDENTIAL

DISCUSSION BETWEEN MR BLAKER AND THE GOVERNOR

14 JULY 1980

Present:

Mr P Blaker MP

Sir E Youde

Mr Clift

Mr Munro

эконо

INDEX

23 JUL 1980 HONG KON

PA

Mo. 51

RY

No WP AW19118

صار

Sir Murray MacLehose

61

•

FUTURE OF HONG KONG AND NEW TERRITORIES LEASES

1.

see (6.5 E&HKK026/17

The Governor said that the new Attorney-General took a different view from his predecessor on the rights of the Hong Kong Government to issue leases beyond 1997. In Mr Griffiths' view this was not legally possible, even with leases of a fixed period. He suggested that, during the Attorney-General's leave in the UK at the beginning of August, he should meet FCO Legal Advisers and representatives of the Lord Chancellor's Office to try to reach an agreed legal view. This could be followed by a political meeting of officials, which the Governor would himself attend, on about 6 August. The aim would be to submit agreed views to the Secretary of State for his visit to China at the beginning of October.

2. Mr Blaker agreed with this timetable. He accepted that it was necessary to distinguish between the long- and the short-term problems. He did not see the Peking authorities as likely to be ready to agree to a long-term formula for several years. Gu Mu's remarks on the need for a solution to be consistent with Chinese and international opinion were significant here.

3. In their discussion on the significance of special zones on the Chinese side of the border, Mr Blaker and the Governor agreed that, while the Chinese had short-term economic advantage in mind, they also had political motives. They wished to demonstrate that they could run areas with a capitalist system inside China and to extend this concept to Hong Kong. Thus they did not necessarily accept that British administration must continue in Hong Kong after 1997 although they were likely to keep their options open and they would probably find it very difficult in practice to develop their special zones quickly enough.

4.

The Governor pointed out that there were great practical diffi- culties for the Chinese in taking over and running Hong Kong, among which the question of law was important. Mr Blaker asked about implications for the rest of China of Peking's encouragement of special zones, incentive schemes etc. Sir E Youde pointed out that

CONFIDENTIAL

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