TNAG-1040-FCO40-1290-Future-of-Hong-Kong-1981 — Page 40

Separate copies to:

Mr Fearn, SAmD

Mr Daunt, SED

BU I weeke

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noted Man 20/11 Koln Noted

SECRET AND PERSONAL

HICK Oys 040

? O NOV 1981

DESK OFFICER INDEX

PA

FUTURE OF HONG KONG: IMPLICATIONS FOR FALKLAND ISLANDS AND GIBRALTAR

1.

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PKUŠŤKY Action TakeN

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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, if a suitable opportunity arises, authorise discussion with the 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.

Bim

· ́R D Clift

20 November 1981

Hong Kong and General Department

SECRET AND PERSONAL