TNAG-1038-FCO40-1288-Future-of-Hong-Kong-1981 — Page 103

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Administration for as long as possible. Must include legal

adjustment to 1898 Order in Council which puts a term on powers

in New Territories. This would certainly require concessions to

the Chinese. These must be kept to minimum (or again confidence

will go).

British Practical Requirements

3.

Various possibilities;

a) Chinese explicit acknowledgement that British

Administration would continue sine die. If linked

to amendment of 1898 Order in Council, would revive

confidence. But still leaves time of Chinese

assumption of administration uncertain.

b) Chinese agreement to period of notice, say 15 years,

of desire to terminate British Administration.

Amendment to Order in Council would be desirable.

Notice, when finally given, would need to be

accompanied by positive guarantees by Chinese covering

transitional period. This may be best option to revive

confidence if obtainable.

c) Chinese agreement to respect land leases expiring after

1997. Could be either public statement or tacit

acquiesence in legislation on our side. Would provide

some reassurance but would not have lasting effect.

Chinese have been unforthcoming on land leases so far.

Chinese Counter Requirements

4.

Chinese have shown themselves suspicious of all British

moves to clarify the post-1997 situation, particularly anything

which involves British legislation to extend powers of

administration beyond that date. Their concerns are an amalgam

of amour propre, caution about pre-empting a Taiwan solution,

other policy and leadership preoccupations and fear of

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