TNAG-1037-FCO40-1287-Future-of-Hong-Kong-1981 — Page 154

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Territories. At present, all land leases in the New

Territories are written to expire in 1997; there is a risk

that, as this date draws closer, businessmen will cease

to invest there, leading to a serious loss of confidence.

Previous UK Proposal and Other Contacts

6. The Chinese rejected a solution we propsoed in July

1979. This would have involved issuing leases without a

terminal date. The Chinese probably objected mainly to

proposal for an Order in Council that would make it possible

for British administration to continue after 1997 should

the Chinese (and, of course, the British) Government so

wish (see Annex B). Lord Carrington raised the question

with Foreign Minister Huang Hua in October 1980 and it has

been raised with NCNA in Hong Kong in the context of a

$ lease for the Tin Shui Wai project. Huang Hua went no

:

further than to repeat the earlier general assurances, but

it was clear from his conversation later with Sir E Youde

that he had taken in the problem.

Possible Official Talks '

7. Chinese leaders may not be ready for detailed discussion

of land leases. There would be no value in such talks with-

out real evidence of direction from the top. Should Deng

Xiaoping appear amenable however to persuasion on the need

for an early solution of the land leases issue, a dialogue

should be sought between officials (see Annex C).

the matter should not be pursued during the visit.

The New Forritories:

8.

Press Line

Otherwise,

The press line recommended in the 'Points to Make' is

similar to that used during Chairman Hua Guofeng's visit in

November 1979.

Chinese Representation in Hong Kong

9.

chinese have raised idea several times in recent years.

/May

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