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DRAFT OD PAPER
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DSR 11C
THIS DOCUMENT IS THE PROPERTY OF HER BRITANNIC MAJESTY'2
GOVERNMENT
[Paper No]
COPY NO
[Date]
CABINET
DEFENCE AND OVERSEAS POLICY COMMITTEE
FUTURE OF HONG KONG : CONTINGENCY OPTIONS
Memorandum by the Secretary of State for Foreign
and Commonwealth Affairs
X
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1.
The attached paper outlines the problems for Her
Majesty's Government of uncertainty over Hong Kong's future
with the approaching end of the New Territories Lease in
1997. The present, relatively pragmatic Chinese adminis-
tration probably favour a continuation of the status quo
but are unwilling to make any hasty move which might pre-
judge the final outcome for the Territory to their
disadvantage. Her Majesty's Government could also live
with de facto continuation of the present position were it
not for the legal problem that the basis of our
administration of the New Territories will expire in
1997.
Meanwhile concern is growing in Hong Kong about the
future, and confidence there could slide quickly, possibly
with a run on the Hong Kong dollar and rapid withdrawal
of investments.
This would create major problems for
Her Majesty's Government in our relations with China, over
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