TNAG-1173-FCO40-1465-Future-of-Hong-Kong-special-study-by-FCO-for-the-Prime-Minis-1982 — Page 151

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(b)

iii) Effect on Hong Kong

The inhabitants of the colony would soon realise that HMG would not be able to protect their interests, and there would be a flight of persons and capital.

iv) Legal Implications

HMG are legally obliged to relinquish the New Territories in 1997. In the unlikely event that we would hang on until then we would have to make eleventh-hour attempts to make the best arrangements we could for the benefit of the inhabitants of the colony and the protection of British interests from a position of great weakness.

Independence

If its political circumstances were different

Hong Kong could be another and economically

more powerful Singapore. But independence would

be completely unacceptable to the PRC, who regard

Hong Kong as an inalienable part of Chinese

territory. It is therefore not worth detailed

consideration.

(c) Renewal of 1898 Lease of New Territories

Legally the simplest solution for HMG but

politically ruled out. The PRC regard the

original lease as the result of an 'unequal

treaty' and are determined on the recovery

of sovereignty over the New Territories

and the rest of Hong Kong in, if not before,

1997. The extension of the Lease would not

in Chinese eyes be compatible with this and

we see no prospect of achieving it.

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/ (d)