TNAG-1040-FCO40-1290-Future-of-Hong-Kong-1981 — Page 51

DSR 11C

SECRET

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the credibility of our commitment to the prople of Hong Kong

and domestically. (To give only one example, large numbers

of Hong Kong residents could seek entry to the United

Kingdom.)

2.

We need soon to decide on the tactics of discussion

with the Chinese on this issue for two reasons:

3.

a) concern about the future in Hong Kong could come

to a head over the next 2 or 3 years and precipitate

slide in confidence;

b)

a

The Prime Minister has agreed in principle to visit

China. This might take place in September 1982.

It would be impossible to avoid mentioning the

Hong Kong problem and the visit would raise

expectations that a solution would be found.

Among the options set out in the paper the most likely

to prove effective are either:

a) a declaration by the Chinese that they would give

long-term notice (say 15 years) of any change in

the status of the Territory; or

b) statements by Her Majesty's Government and the

Chinese that Hong Kong is Chinese territory

temporarily under British administration and that

the Chinese have no intention to change this for

many years to come.

The Chinese price for option (a) would almost certainly be

renunciation of sovereignty by Her Majesty's Government.

Option (b) also amounts to technical renunciation of

sovereignty. However an adjustment of the status of the

New Territories will in any event be necessary in 1997 and

the rest of the Territory would not be viable on its own.

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