TNAG-0944-FCO40-1163-Future-of-Hong-Kong-1980 — Page 15

SECRET

DSR 11C

DRAFT BRIEF

TALKS WITH THE CHINESE FOREIGN MINISTER ON 1 OCTOBER 1980

BRIEF NO 4(a): LONG-TERM FUTURE OF HONG KONG AND INDIVIDUAL

LAND LEASES IN THE NEW TERRITORIES

POINTS TO MAKE

1.

Noted remarks of Deng Xiaoping, Hua Guofeng and Gu Mu

about Hong Kong, but helpful to discuss with Huang Hua

distinction between long-term future of Hong Kong and

short-term problems for investors.

Not too soon to begin thinking seriously about longer

term but accept that this is delicate and difficult.

2.

3.

However, short-term objective is to sustain Hong Kong's

prosperity and stability in the meantime. There is plenty

of scope for mutually beneficial cooperation, for example,

in the fields of water supply, electricty and other major

projects.

4.

But a key problem is how to maintain willingness of

people and firms to invest in property in the New

Territories. Way must be found to give them rights to

property which could continue beyond 1997 without

prejudicing Chinese basic position. This problem will be

critical from mid-1982 since the standard mortgage in the

Territory is 15 years. Arrangements to meet this are

desirable by end of 1981. We think a step-by-step approach

working on individual cases could create these.

[Depending on Huang Hua's response]

It is important to keep in touch on these problems.

The short-term technical matters cannot be put off for too

5.

long.

SECRET

Dd 0532000 400 M 5178 HMSO Bracknell

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