TNAG-1037-FCO40-1287-Future-of-Hong-Kong-1981 — Page 160

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DRAFT

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·DSR 11C

ANNEX C

LAND LEASES IN THE NEW TERRITORIES

POINTS TO MAKE

long-term and short-

1. Two aspects to Hong Kong problem

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

This will require action in short-term. Key

prosperity.

to question is New Territories land leases. 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,

2. No fixed ideas on form lease should take.

One poss-

ibility would be straightforward lease stretching beyond

1997. Possible, though unlikely, that such a lease may be

challenged in courts. If so, its validity can quickly be

established by legislation. This would be no problem and

would not need to refer to continuing British administration.

Another possibility would be to issue a lease for one

year only, but automatically renewable unless land required

for 'public purposes'.

3.

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 guaran-

teeing right to property irrespective of 1997?

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