TNAG-1840-FCO40-2615-House-of-Commons-Select-Committee-on-Foreign-Affairs-enquiry-1989 — Page 119

SECURITY CLASSIFICATION

Top Secret

Secret

Confidential

Restricted

Unclassified

PRIVACY MARKING

In Confidence

DSR 11C (Revised 5/87)

view that the whole of Hong Kong is Chinese territory.

For many years its position was that the treaties

relating to Hong Kong were unequal ones left over from

history; that the question should be settled peacefully

through negotiation when the time was ripe; and that

pending a settlement the status quo should be maintained.

It made it clear that in its view the settlement of the

question of Hong Kong was a matter of China's sovereign

right.

3.

The expiry of the New Territories' lease on 30 June

1997 made it necessary to tackle the question of the

future as soon as possible after China's emergence from

the Cultural Revolution. It was clear that the remaining

8% of Hong Kong's land area would not be viable without

the New Territories, which contain most of the

territory's agriculture and industry, its power stations,

and its airport and container port. Moreover, by the

late 1970s, concern about Hong Kong's future, both

locally and amongst foreign investors, began to grow.

The inability of the Hong Kong Government to grant new

land leases in the New Territories extending beyond 1997

was a particular problem which was becoming progressively

more serious. Simply to have ignored the 1997 deadline

was not an option: the legal instrument under which the

New Territories was governed was due to expire in 1997;

and uncertainty as to what would happen thereafter would

have led to an erosion of confidence as the reality of

Hong Kong's uncertain future became closer and clearer.

4. Against this background, the British Government