TNAG-1039-FCO40-1289-Future-of-Hong-Kong-1981 — Page 24

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(i) Likelihood.

Easiest option for Chinese.

Harder

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-

as the assurances about no change become firmer.

DSR 11C

Problems for HMG. None, except :-

B)

(ii)

(iii) Effect. At best temporary. Such encouragement

and assurances would cause some local Chinese investors

to maintain investments. Little effect on foreign

Not

investors unless coupled with action on land leases.

sufficient to halt a serious slide of confidence for long,

if at all, because unsupported by either firm and

'bankable' description of conditions under Chinese law,

or assurance of continuance of British jurisdiction.

Declaration by the Chinese that, because treaties unequal,

Hong Kong would revert to China when the

1997 irrelevant;

time was ripe.

(i) Likelihood.

}

If as a formal statement a slight but

More

significant change in present Chinese position.

difficult than (A) for Chinese however as it implies

continuing British administration beyond 1997. Becomes

progressively more difficult for them the more that is

said about time not being ripe for many years to come.

(ii) Problems for HMG. A Chinese statement that the

lease should be ignored would presumably imply that China

claims to possess sovereignty and that the UK has no valid

claim to sovereign rights; and

(iii)

Effect. Would be too vague to have significant

effect, even if coupled with (A) above. The clearer

the implcation of no change for a long time, the more

beneficial the effect. But it would lack credibility

unless coupled with agreement to action by HMG to take

continuing powers of administration beyond 1997.

C) Joint or parallel statements by Chinese and HMG that

treaties no longer applicable; Hong Kong Chinese territory

temporarily under British administration