TNAG-1167-FCO40-1447-Future-of-Hong-Kong-1982 — Page 20

S.

C)

И

D)

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Joint or parallel statements by Chinese and HMG that Treaties no longer applicable; Hong Kong Chinese territory temporarily under British administration but this would continue beyond 1997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. Nevertheless, generally accords with their present tacit position, and involves significant public renunciation by HMG.

ii) Problems for HMG. Recognition of Chinese sovereignty over Hong Kong requires an Act of Parliament divesting the United Kingdom of sovereignty. Implications of abrogation. Legal status of Hong Kong, particularly in international agreements, would need to be clarified. Need for legislation on land leases and continuing powers of administration which would have to be of indeterminate length. (Automatically renewable periodic leases possible.) Might be coupled with demand for use of Chinese flag (cf stated policy towards Taiwan).

iii) Effect.

Impact would depend on assumptions about how long the arrangement was expected to last. Initial effect might be to produce uncertainty, unless Chinese made it clear that they expected the arrangement to last at least 15 years.

But confidence would grow over time as it would be up to the Chinese to foster it if they wished their benefits from Hong Kong to continue. It should eventually produce a Macao-like reliance on traditional tenure.

Declaration by the Chinese that change would only occur with adequate warning; a possible minimum period would be 15 years

Still, Powers

i) Likelihood. Slightly more difficult than (C), as Chinese

would be tying themselves to a specific period. Becomes harder if selected period stretches beyond 1997. But Zhou Enlai did say to Sir Alec Douglas-Home in 1972 that Chinese would take no surprise action over Hong Kong. Might be possible to build on this. Private hints on length of warning easier for the Chinese than public statements.

ii) Problems for HMG. Almost certainly would be combined with

Chinese demand that HMG concede Chinese sovereignty. better than (C), as it guarantees length of tenure. 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. Base for continued British administration Chief drawback would have to be negotiated with Chinese. lies in the fact that the assurance is only effective so long as the Chinese do not institute a period of warning. As soon as that happened we would face weakening confidence in Hong Kong, although certainly firms and others would have as much time as they have now to make their plans.

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