TNAG-0945-FCO40-1164-Future-of-Hong-Kong-1980 — Page 87

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for a longer lease beyond 1997. If they did this we could go to Peking and check that they agreed with the idea mentioning the question of the possible need for legislation at some stage to offset a challenge in the courts.

e) Action in Hong Kong: Apart from fielding any moves on

concrete questions such as Tin Shui Wai, the Governor would take suitable opportunities to impress on senior Chinese visitors our continuing concern at the land leases question.

Long-Term Future

3. It was agreed that a paper should be prepared to examine the implications of different options:

4.

a) if the Chinese demanded a take-over of Hong Kong;

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b) if they agreed to continuance of the status quo;

c) if they suggested a new political arrangement acknowledging

their sovereignty but maintaining a special economic status for Hong Kong outside the RMB currency area and

with some element of British administration.

The Governor emphasised that this should be done quickly. It could become a practical requirement quite soon.

5. It was agreed that the Governor would mention the idea to the Secretary of State and that the FCO would then first draft an outline

to the agreed with the Governor to be followed by a draft substantive paper.

6.

In Hong Kong the project would be known only to the Governor, Chief Secretary and Political Adviser. In the FCO the group would be restricted on a need to know basis. Consideration would be given later to consultations with other Whitehall Departments.

Action (after the Governor's meeting with the Secretary of State)

7. a) Land leases. Write to HM Ambassador, Peking, to outline

agreed tactical line (I suggest this goes from Sir E Youde);

b) Long-Term. Prepare outline draft paper and send to Governor.

4 November 1980

cc Mr McLaren FED

Mr Morrice

R D Clift

Hong Kong and General Department

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