TNAG-1041-FCO40-1291-Future-of-Hong-Kong-1981 — Page 78

SECRET

Mick 040!!

16 DEC 1961

Sir E Youde

cc PS/PUS

Minute

Mr Donald

13/12

Mr Elliott FED

Mr Rushford, Legal Advisers

DEJK

INDSX

Mr Mallaby, Planning Staff

146

255 12

FUTURE OF HONG KONG

PROBLEM

birken

86014/12

(92

See Hkkoyol, 1982 никофорі

see GUSSA

1. To consider contingency plans for the medium and long-term future

275

and tactics for the proposed visit to China and Hong Kong by the 284

Prime Minister in 1982.

RECOMMENDATION

See Hien 040/1 237 +248

ник

19/2

2.

I recommend that:

A

B

a) Ministers should endorse the attached draft contingency paper;

b) the Secretary of State should write to the Prime Minister as in

the attached draft.

FED and the departmental Legal Adviser agree. SED and SAmD have been

consulted on paragraph 12. The Governor of Hong Kong and HM Ambassador,

Peking, have contributed to the papers.

BACKGROUND AND ARGUMENT

3. The Lease of the New Territories ends in 1997.

begin to affect investment confidence in Hong Kong.

This will soon

Unless the future

is clarified, this will happen by 1985 at the latest, perhaps sooner.

4. Chinese and British views. The Chinese claim that all the treaties

affecting Hong Kong are 'unequal'. But they have not formally abrogated

them. They are deliberately equivocal about the significance to them

of 1997. On the British side, the legal position is clear cut. Unless

new powers are taken, the Governor's right to administer the New

Territories ceases in 1997. In British law there is a distinction

SECRET

/between