TNAG-1259-FCO40-1599-The-Future-of-Hong-Kong---special-study-by-FCO--August-1982--1983 — Page 230

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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)