TNAG-1040-FCO40-1290-Future-of-Hong-Kong-1981 — Page 177

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THE FUTURE OF HONG KONG:

CONTINGENCY PLANNING

Problem & Background

*

The

The lease of the New Territories ends in 1997. shadow of this date will soon begin to effect investment confidence in Hong Kong. Unless future prospects are satisfactorily clarified, this will happen by 1985 at the latest, perhaps sooner.

2. The Chinese claim that all the treaties affecting Hong Kong are 'unequal". But they have not formally abrogated them. They are deliberately equivocal about the significance to them of 1997. On the British side, the legal position is clear cut. Unless new powers are taken, the Governor's right to administer in the New Territories ceases in 1997. In British law there is a distinction between the New Territories and the rest of Hong Kong which is held in perpetuity. But, in practical terms, the whole territory is now indivisible. The Lease problem therefore affects the future of the whole of Hong Kong.

3. So far attempts to get the Chinese to focus on this problem, including specific suggestions for an interim solution made in 1979, have failed. For the Chinese leadership, doing anything to prolong British administration is a political minefield. They are happy with the present position by which Britain administers Hong Kong and China gains great economic advantage from it. But they have made

it clear that they are in no hurry to deal with the

problem of the longer term future. They believe that

the generalised assurances they have already given (investors should set their hearts at ease

whatever happens

零零

their interests will be looked after) are sufficient. They are not because they overlook that unless certainty of the ending of the Governors' powers in 1997 is removed, confidence will fade quite soon. Moreover administration will become increasingly difficult as the time for which the Government can legally commit itself shortens.

4. When the Chinese are prepared to discuss the future, parallels with their policy towards Taiwan suggest that giving up sovereignty will be their minimum demand, but they would concede a wide degree of autonomy whatever that could mean in the circumstances.

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