TNAG-0944-FCO40-1163-Future-of-Hong-Kong-1980 — Page 133

DRAFT

SECRET

FUTURE OF HONG KONG AND LEASES IN THE NEW TERRITORIES

DSR 11C

Points Requiring Further Elaboration

1.

How far do Chinese differentiate between short- and long-

term problems? Do they understand our "leases" problem?

(We

2. Our own aims: Do we agree that we must proceed step by

step, with the short-term problem the first priority?

must, however, not rebuff the Chinese if they offer a

dialogue on the longer-term issues.)

3. Given the Chinese rejection of our proposals in 1979,

can we get an understanding that New Territories leases

should run beyond 1997 without any reference to continuing

British administration?

4. Legal position on leases.

Indeterminate leases would

Determinate

not be possible without fresh legislation.

leases (e.g. for 25 years) might be legally feasible without

legislation, but the position is not sufficiently clear to

avoid challenge in the courts. Possible option of

"periodic" leases automatically renewable if not terminated

by either side.

5. Chinese attitude to legislation. They objected to this

in 1979. Was this because of the proposed link with British

administration, or would they see any legislation affecting

the post-1997 situation as unacceptable?

6. It would be possible to have unpublished legislation by

means of Royal Instructions conveyed by the Secretary of

State to the Governor which could be revealed at the appro-

priate moment if the grant of a lease beyond 1997 was

challenged. There are domestic political drawbacks in this.

Would the Chinese have to be told in advance (but in confi-

dence) and how would they react?

SECRET

17.

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