TNAG-1036-FCO40-1286-Future-of-Hong-Kong-1981 — Page 127

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DSR 11C

c) Continuance of Status Quo beyond 1997 with tacit Chinese

aquiescence

Prospects: Easier than (b). Chinese could take line that

1997 is British problem. But Peking might still object to

any UK legal device as basis for continuing administration

of New Territories.

Implications for HMG: Some boost to confidence but

indefinite duration of administration would continue

incertainty. Legal problem of basis of rule.

LAU

d) Continuance of de facto status quo with legal changes. UK

would recognise Chinese Sovereignty (formal rendition) in

return for acceptance of continuing British administration

(on Macao model)

Prospects:

Possible. Might reconcile Chinese national

and pragmatic requirements.

Implications for HMG : Effect on confidence would depend

on duration of British 'tenancy'. Legal problems would

include basis for administration and citizenship status of

Hong Kong residents.

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Dd 0532000 400 M 5/78 HMSO Bracknell

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