TNAG-1040-FCO40-1290-Future-of-Hong-Kong-1981 — Page 21

M. McQuade of

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The proposed passage seems all right. As the Feeklands leaseball perfotal you say,

controversial.

SECRET AND PERSONAL is cheady public, if

RECEIVED BY ARTEY MD. 51 Separate copies to: 23 NOV 1981

Mr Fearn, SAmb DESK OFFICER

INDEX

PA

Mr Daunt, SED

NO

CSE 25/11

FRUSTRY Action Taken

Knowledge. I do not know the bruning of an advancy of a similar proposal for Hory Kay: bid suspect their the Frediants could well be resolved one or another by

one.

FUTURE OF HONG KONG: IMPLICATIONS FOR FALKLAND ISLANDS AND GIBRALTAR

1.

•

Strictly for your own information, we are preparing a submission and contingency paper on the future of Hong Kong. This includes a recommendation to Ministers that they should,

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if a suitable opportunity arises, authorise discussion with the Seef 251

Chinese on a possible renunciation of British sovereignty over Hong Kong Island and Kowloon in return for an assurance that British administration could continue in practice for a reasonable period beyond 1997 when the present Lease on the New Territories expires.

2.

We need to make a reference in the submission to the possible implications in such a move for the Falkland Islands and Gibraltar situations. I should be grateful for your and Mr Daunt's views on whether the following passage would fit the bill:

3.

'If the Chinese are prepared

-

to have talks

on Hong Kong, it is likely that one major concession they would ask for would involve British acknowledgement of their sovereignty over the Territory.

There are obvious political difficulties. There could be implications for other Dependent Territories, in particular the Falkland Islands and Gibraltar. But this should be containable a lease-back in return for acknowledgement of Argentine sovereignty has in fact alrady been canvassed for the Falklands. So far as Hong Kong is concerned, there is no question of avoiding some sort of change in 1997. A concession on sovereignty would therefore be a price worth paying for the removal of uncertainty and the maintenance of a form of British administration for as long as possible beyond 1997.1

I should add that it is the view of our departmental Legal Adviser that, while a renunciation of sovereignty over Kowloon and Hong Kong Island would require an Act of Parliament, we would not necessarily need a formal Treaty with China in order to obtain their acquiesence to the continuation of British administration.

4.

I should be grateful if you would not pass this information further within your departments. We are restricting knowledge of contingency planning on Hong Kong very tightly indeed.

Win

R D Clift

Hong Kong and General Department

20 November 1981

SECRET AND PERSONAL