TNAG-1037-FCO40-1287-Future-of-Hong-Kong-1981 — Page 41

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a) The status of Hong Kong's population and the pressure

on HMG to settle CBDTs in the UK;

b) Divided loyalties among the Civil Service and the Police

and demands on IIMG for special treatment;

c) Need to preserve Hong Kong's separate economy, currency

and position in international economic organisations,

trade and air agreements;

d) The role of the British Garrison, in a transition period

and possibly beyond;

e) Legal problems including:

i) the legacy of the 'unequal' treaties on which

present British rule rests;

ii) reconciliation of continuing British administration

with a recognition of ultimate Chinese sovereignty;

iii) provision of a legal basis for a British contribution

to a new system of government;

iv) legal problems during a transition period;

v) legal problems of citizenship (see (a)).

CONCLUSIONS

13. a) It is unlikely that China will wish to move on a long-term

solution during the next 5 years, but the dangers of

collapse in Hong Kong without one may force her to do so;

b) In the medium-term we should aim at arrangements to

maintain confidence covering the problem of land leases

in the New Territories. This may not be possible without

getting involved in a discussion on fundamentals. We

should not make concessions on sovereignty or a Chinese

representative without substantial undertakings which

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/would