TNAG-1038-FCO40-1288-Future-of-Hong-Kong-1981 — Page 73

DSR 11 (Revised)

DRAFT:

FROM:

SECRET

minute/letter/teleletter/despatch/note

DEPARTMENT:

SECURITY CLASSIFICATION]

TO:

Top Secret

Secret

Confidential

Restricted

Unclassified

PRIVACY MARKING

.In Confidence

CAVEAT.....

TEL. NO:

TYPE: Draft/Final 1+

Reference

Your Reference

Copies to:

SUBJECT:

FUTURE OF HONG KONG: NOTES ON CONTINGENCY PROPOSALS TO COPE WITH A SLIDE IN CONFIDENCE

Problem

1.

Chinese disinclined to give concrete guarantees on

Hong Kong status quo. Suspicious of our attempts to deal

with individual land lease question. Consensus view that

without such guarantees public confidence will before long

snap and disinvestment will cause slide in Hong Kong's

economy. Will almost certainly occur within 5 years.

But confidence a brittle commodity. Snap could be soon

and sudden.

Enclosures-flag(s).....

Objective

2.

that

Chinese

'Long-term solution' means that British) Adminis-

eventually supersede that of the Burn

Ви tration would cease to be the dominant element in Hong

Kong and that the Territory would in legal terms become

part of China [Chinese take-over in some form].

In long

run this might be combined with continuing confidence

in Hong Kong depending on degree of independent economy

and administration. But at present any suggestion of

negotiation on such a solution would lead to a rapid

slide. Moreover Chinese not ready for it. Therefore now

need contingency proposals for extension of British

SECRET

/Administration