TNAG-1040-FCO40-1290-Future-of-Hong-Kong-1981 — Page 34

D)

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DSR 11C

Declaration by the Chinese that change would only occur

with adequate warning; this defined as 15 years

(i) Likelihood. Slightly more difficult than (C), as

Chinese would be tying themselves to a specific period.

Becomes harder if selected period stretches beyond 1997.

But Zhou Enlai did say to Sir Alec Douglas-Home in 1972

that Chinese would take no surprise action over Hong Kong.

Might be possible to build on this. Private hints on

length of warning easier for the Chinese than public

statements.

(ii) Problems for HMG. Almost certainly would be

combined with Chinese demand that HMG concede Chinese

Still, better than (C), as it guarantees

sovereignty.

length of tenure.

Powers of continuing administration

Basis

could be tied to Chinese declaration. So could land

leases. Both require Chinese assurances about the

period of warning to be made public in some firms.

for continued British administration would have to be

Chief drawback lies in the fact

negotiated with Chinese.

that the assurance is only effective so long as the

Chinese do not institute a period of warning.

As soon

as that happened we would face weakening confidence in

Hong Kong, although certainly firms and others would have

time to make their plans.

(iii) Effect. Major boost to confidence.

Sufficient

to halt slide of confidence. But only provided it was

quickly followed by UK legislation to bring B ritish

jurisdiction and powers of administration into line with

ǹew concept of validity of 15 years constantly rolled

forward until notice given by CPG. The legal mechanics

. would need to be worked out.

E) Unilateral action by HMG to take powers to issue land

leases beyond 1997; assurance of tacit Chinese approval

(i) Likelihood. Possible, particularly if done in the

form of automatically renewable periodic leases and with

no mention of 1997. Chinese might see it as a necessary

way of preserving investor confidence. Has advantage of

requiring little action on their part.

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