TNAG-1167-FCO40-1447-Future-of-Hong-Kong-1982 — Page 150

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DSR 11C

to enter a dialogue without such a threatening incentive.

There have been some signs of this, of: during the visit of the LPS in Jany 1982.

Actions to halt'a slide in 'confidehce or to respond to a

Chinese initiative

16. The following possible actions are graded in a rough ord

of ascending difficulty for the Chinese. An important featur

of most of the proposals is that any action to extent British

administration would,

, require amendment or

replacement of the 1898 Order in Council providing for and

defining the length of jurisdiction in the New Territories

(Annex B) (which in turn is directly related to the Conventio

of Peking 1898 (Annex C)). This would almost certainly

need Chinese agreement or at least their readiness not to

object to the legislation if challenged. The Attorney-Genera

shares the opinion of our departmental Legal Adviser that any

amendment would need explicitly to make clear the intention

of HMG to administer the New Territories beyond 1997. Α

number of the proposals also include the notion of a

relinquishment of sovereignty by HMG. We do not know that

the Chinese would in fact demand this but it is a logical

move for which we must be prepared.

A) Reinforcement of existing assurances

T

The Chinese would talk at a high level to major local

investors in Hong Kong to encourage them to retain and

increase their investments. They would do the same

with selected foreign investors, banks, industrialists

and developers. They would reinforce assurances about

capitalism continuing in Hong Kong well into the next

century and imply that a change of status in 1997 was

unlikely.

(i) Likelihood.

Easiest option for Chinese.

Harder as

the assurances about no change become firmer.

(ii) Problems for HMG.

None, except:

/(iii)

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