TNAG-1037-FCO40-1287-Future-of-Hong-Kong-1981 — Page 161

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ANNEX C

DSR 11C

LAND LEASES IN THE NEW TERRITORIES

ESSENTIAL FACTS

1.

Initial exchanges on possible forms of land lease should

Should avoid suggestion that we have

be exploratory.

reached firm conclusions. Broad alternatives appear to be:

a) fixed term leases extending beyond 1997 Those should

provide reasonable reassurance for investors and would

imply (though not state) some form of British admini-

stration after 1997. They could thus pose political

problems for the Chinese;

b)

2.

a periodic lease renewable each year unless land required

by the Hong Kong Government for 'public purposes'. This

would not impy post-1997 jurisdiction so directly, but

it would be less attractive to investors.

An additional problem over (a) is that it would probably

require a fresh legal basis since the power of the Hong Kong

Government to act in this way is not clearly established.

It could be put beyond doubt by an Order in Council. This

would not refer to the continuance of British administration

of the New Territories after 1997, although it would imply

It is not possible to gauge the Chinese reaction to

such a move.

it.

3. If the Chinese accepted the principle of such a legal act

the timing of its implementation could be discussed. Whilst

there is a clear advantage in establishing the legal basis

for extended leases before they are issued, publication of

the Order in Council itself might attract undue public

attention or speculation. An alternative would be to employ

the instrument retrospectively and only if and when the

/legality

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