TNAG-1037-FCO40-1287-Future-of-Hong-Kong-1981 — Page 101

DRAFT PAPER

SECRET

THE FUTURE OF HONG KONG OPTIONS AND PROBLEMS

Aim

DSR 11C

1.

To consider possible options for the future of Hong Kong

in the medium and long-term and the implications for HMG.

Present Position and the British and Chinese Attitudes

2. Hong Kong as a whole is one Crown Colony. But only Hong

Kong Island and the southern part of the Kowloon Peninsula

by virtue of cession

belong

1

to the Crown/in perpetuity. The New Territories,

including the outlying islands, are held under a 99-year

'lease' from China, which expires on 1 July 1997. In practice

a

the ceded areas would not be viable on their own and there is

The future of

Hong Kong will

be determined ·

largely by the

wishes of the

Chinese Govern-

ment.

a uniform system of government for the Territory as a whole;

but there are legal distinctions which have political and

economic significance. The most immediate is that whereas

in the ceded areas leases of Crown land are granted for 75

years, in the New Territories they expire 3 days short of the

end of the Lease from China. As the period shortens the

risk grows of potential investors being discouraged and of damage to confidence.

3.

HMG

It is a fundamental difficulty for/ that their title to

occupy and administer Hong Kong, while confirmed by uni-

lateral Orders in Council and Letters Patent, rests upon a

SECRET

/series

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