TNAG-0945-FCO40-1164-Future-of-Hong-Kong-1980 — Page 30

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RECEIVED INCESTRY NO. 51 10 DEC 1980

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FUTURE OF HONG KONG AND NEW TERRITORIES LEASES

1.

今に

The latters vesed this

weekend.

During my visit to Hong Kong I discussed this with the Governor, the Political Adviser and other officials. The following points, which came up at the round-up meeting on 29 November, summarise the position.

2.

574/12

see (163

After further messages from intermediaries, the Governor has agreed that the Secretary for the New Territories, Mr Akers-Jones, should probe further

the possibility of a lease beyond 1997 for Tin Shui Wai development. He will do this very shortly by speaking to the land official of the China Resources Company.

3.

Mr Akers-Jones will mention the two broad proposals

which have come through intermediaries:

a) A lease beyond 1997 with no terminal date;

b)

A lease of 75 years with an option for a further 75 years (as on Hong Kong Island).

He will ask which option China Resources would prefer. If the answer is that they would like neither, he will draw their attention to the apparent inconsistency of this approach with the long-range development proposals which they have submitted for the project.

4.

If, on the other hand, China Resources do express interest in either or both solutions, Mr Akers-Jones will explain the requirements of British law in each case covering:

5.

i) the concept of a periodic lease automatically

renewable annually;

ii) a normal lease extending for a period beyond 1997.

He would say that this could possibly be challenged at law but that this could be put right by action in London (he would not go into detail about Orders in Council etc).

His aim in all this would be to try to establish whether a broad scheme could be envisaged which would be acceptable under British law and to the Chinese authorities. If China Resources still seemed interested, he would ask whether they were speaking with the authority of the Government in Peking. If they confirmed this he would say that both sides needed time to reflect and would report back.

SECRET

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