TNAG-1037-FCO40-1287-Future-of-Hong-Kong-1981 — Page 12

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ANNEX A

SUPPLEMENTARY BRIEF: IN THE NEW TERRITORIES POINTS TO MAKE

CONFIDENCE IN HONG KONG : LAND LEASES

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1.

Two aspects to Hong Kong problem

long-term and short-term.

We are both agreed on need to maintain Hong Kong's prosperity. This

requires some action in short-term.

Individual New Territories land

leases important factor. Diminishing period of leases will be serious

deterrent to investors in a year or two. Must find means of giving

rights to property that do not automatically end in 1997. Accept

that we must do this in a way that will not prejudice China's position

in long-term. Aiming at maintaining stability in common interest.

2. No fixed ideas on form lease should take. One possibility

would be straightforward lease for period beyond 1997. There would

be legal implications for us. Possible, though unlikely, that

Governor's authority to issue such a lease would be challenged in

This could be prevented by appropriate British legislation.

If it would be easier for the Chinese Government we could consider

issuing long-term leases without a new Order although we would have to

be prepared to validate them later. We might also

the courts.

have to explain the position publicly eg in Parliament. In either

event there would be no need to refer to continuing British adminis-

tration of New Territories.

3. Another possibility would be to issue a lease for one year only,

but automatically renewable each year unless land required for

'public purposes1. Probably not so attractive to investors, but

could not be challenged in courts.

4. Do Chinese have views on other ways of tackling problem?

Should it take form of joint declaration guaranteeing right to

property irrespective of 1997?

/5.

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