TNAG-1167-FCO40-1447-Future-of-Hong-Kong-1982 — Page 151

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(iii) Effect. At best temporary.

DSR 11C

Such encouragement

and assurances would cause some local Chinese investors

to maintain investments.

Little effect on foreign

investors unless coupled with action on land leases.

Not sufficient to halt a serious slide of confidence for

long, if at all, because unsupported by either firm and

?

'bankable' description of conditions under Chinese law,

or assurance of continuance of British jurisdiction.

B) Declaration by the Chinese that, because treaties unequal

1997 irrelevant; Hong Kong would revert to China when th

time was ripe, with the clear understanding that British

administration would continue beyond 1997

C)

More

Becomes

(i) Likelihood. If as a formal statement a slight but

significant change in present Chinese position.

difficult than (A) for Chinese however as it implies

continuing British administration beyond 1997.

progressively more difficult for them the more that is

said about time not being ripe for many years to come.

(ii) Problems for HMG. None: the Chinese already claim

sovereignty. A statement from them that the lease shoul

be ignored would however open the way for us to take

legal measures that would align the practical reality

in Hong Kong with Chinese stated views.

(iii) Effect. Would be too vague to have significant

effect, even if coupled with (A) above, unless coupled

with agreement to action by HMG to take continuing

powers of administration beyond 1997.

Joint or parallel statements by Chinese and HMG that treaties no longer applicatble; Hong Kong Chinese territory temporarily under British administration but this would continue beyond 1997

(i) Likelihood. Not easy, as it requires public approval by the Chinese of British administration.

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/Nevertheles