TNAG-0944-FCO40-1163-Future-of-Hong-Kong-1980 — Page 90

DRAFT

SECRET

DSR 11C

SECRETARY OF STATE'S VISIT TO CHINA: FUTURE OF HONG KONG

SUPPLEMENTARY BRIEF ON LEASES IN THE NEW TERRITORIES

POINTS TO MAKE

1.

As in paragraph 3 of the 'Points to Make' of the main

brief.

2.

Will tackle this problem in low-key fashion so as to

avoid speculation, but already much public discussion in

Hong Kong and British press.

Essential, however, to keep

content of our discussions confidential. But will need to

say something to the press after Secretary of State's visit.

We suggest the following:

3.

The future of Hong Kong was touched on by Ministers

as part of the continuing dialogue between the two

countries. Discussion of certain technical questions,

including the issue of leases in the New Territories,

took place at official level and it was agreed that

the two sides would keep in touch!'

On the practical problem of the granting of leases in

the New Territories extending beyond 1997, this would be

possible but we would wish the first lease to be in favour

of a Chinese Government agency or official organisation

in Hong Kong and for a fairly lenghty period, say 25 years.

Would seek Peking's approval to first such lessee.

4. Under British law, there would have to be a legal basis

for issuing a lease running beyond 1997 in case it was

challenged, eg by a sub-lessee. [This would be established

in advance of such a lease being issued] or [However, this

could be done retrospectively and only if and when there is a

challenge to the legality of the Governor's action in issuing

a lease going beyond 1997]. The instrument would be a simple

act of state, ie an Order in Council, to give

SECRET

/effect

S4200(22454) DD.0532198 300M 7/79 GWB LTD.GP.870

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