TNAG-0945-FCO40-1164-Future-of-Hong-Kong-1980 — Page 45

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SECRET & PERSONAL

Foreign and Commonwealth Office

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London SW1A 2AH

26 November 1980

Sir Murray MacLehose GBE KCMG KCVO Governor and Commander-in-Chief - HONG KONG

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Der Hurray,

FUTURE OF HONG KONG

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As I promised when you were in London, I am writing to set out the further action agreed in your conversation with the Secretary of State on New Territories leases and the longer-term future of Hong Kong.

2

On the short-term problem of land leases in the New Territories the Secretary of State took the view that we should allow more time for the Chinese to digest the problem following the recent discussions with Huang Hua; and for more pressure to be brought on them through their own contacts with Hong Kong. They are now starting to appreciate the nature of the practical difficulties over land leases, including the significance of 1982 and the risk of a set-back to confidence in Hong Kong. The point is likely to be reinforced by members of the Hong Kong business community on visits to China. There may be a case for you selectively to brief such people, although clearly this would have to be done very judiciously. The aim would not be to put proposals to the Chinese through intermediaries but simply to ensure that the general nature of the problem is brought home to them in such a way as to reinforce what we have already said to them.

3 This would mean that we would take no further initiative in putting to them ways of solving the problem before the Secretary of State's visit next Spring. We have just proposed dates to them for the visit. He will of course wish to raise the matter with the Chinese then. The exact line which he would take will depend on developments meanwhile.

4

If the Chinese in the meantime approached us, in Hong Kong or in Peking, to ask our ideas on ways of dealing with the problem, you, or Percy Cradock, would undertake simply to report back and to seek instructions, though you could, if appropriate, take the opportunity to reiterate our view of the nature of the problem. In consultation with you and Percy we could consider whether any adjustment was needed to the proposals which were agreed before the Secretary of State's October visit and decide where and how the Chinese approach should be dealt with.

SECRET & PERSONAL

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