TNAG-1167-FCO40-1447-Future-of-Hong-Kong-1982 — Page 153

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DSR 11C

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E)

(ii) Problems for HMG. Almost certainly would be

combined with Chinese demand that HMG concede Chinese

sovereignty. Still, better than (C), as it guarantees

length of tenure. Powers of continuing administration

could be tied to Chinese declaration. So could land

leases. Both require Chinese assurances about the

period of warning to be made public in some firms.

for continued British administration would have to be

Chief drawback lies in the fa

negotiated with Chinese.

that the assurance is only effective so long as the

Chinese do not institute a period of warning.

Bas

As soon

as that happened we would face weakening confidence in Hong Kong, although certainly firms and others would ha

as much time as they have now to make their plans.

(iii)

Effect. Major boost to confidence.

Sufficient

to halt slide of confidence. But only provided it was

quickly followed by UK legislation to bring British jurisdiction and powers of administration into line wil new concept of validity of 15 years constantly rolled forward until notice given by CPG. The legal mechanics

would need to be worked out.

Unilateral action by HMG to take powers to issue land

leases beyond 1997; assurance of tacit Chinese approv:

Likelihood. Possible, particularly if done in

(i)

form of automatically renewable periodic leases and wit

no mention of 1997. Chinese might see it as a necessa

Has advantage.

way of preserving investor confidence.

requiring little action on their part.

(ii) Problems for HMG. Only a temporary palliative

unless coupled with power of continuing administration (iii) Effect. If done now, a short-term beneficial

/effect

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