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THE BACKGROUND TO THE NEGOTIATIONS
5. In the late 1970's, as the period before the termination of the
New Territories lease continued to shorten, significant concern
about the future of Hong Kong began to be expressed both in the
territory itself and among foreign investors. In particular there was increasing anxiety about individual land leases granted in the
New Territories, all of which are set to expire 3 days before the
expiry of the New Territories lease in 1997. There was a danger
that the steadily shortening span of these leases, and the inability
of the Hong Kong Government to grant new ones extending beyond 1997,
would deter investment and damage confidence.
6. The Government had by this time, following a careful examination
of the problem conducted in consultation with the Hong Kong
Government, concluded that confidence would begin to erode quickly
in the early to mid-1980s if nothing was done to alleviate the
uncertainty caused by the 1997 deadline in a way consistent with the
position of the Chinese Government on Hong Kong's future.
Accordingly, when the Governor of Hong Kong visited Peking in March
1979 at the invitation of the Chinese Minister of Foreign Trade,
discussions took place on the problem of land leases in the New
Territories. These discussions did not result in measures to solve
the problem.
7. In the course of the next two years there was increasing
awareness of the need to remove the uncertainty which the 1997
deadline generated, and some discussion of how this might be
achieved. The importance of the issue was publicly stressed by the
senior Unofficial member of the Executive Council in May 1982. In
January 1982 Sir (then Mr) Humphrey Atkins, Lord Privy Seal, visited
Peking and was given significant indications of Chinese policy
towards Hong Kong by Chinese Leaders, which confirmed the view of
the Government that negotiations should be opened with the Chinese
Government.
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