Hong Kong’s future in the balance

Press, 16 July 1983, Page 16

Hong Kong’s future in the balance

By

GRAHAM STEWART,

of Reuters

Secret diplomacy is masking a sense of optimism that Britain and China are moving towards resolving the future of Hong Kong, the British colonial outpost that is Peking’s gateway to the capitalist West.

“The signs all point to progress being made but we don’t know for sure because no-one in the know is saying anything,” said one Western diplomat. “Talk about the Chinese being inscrutable. Mention Hong Kong and the British become even more inscrutable,” lamented the exasperated diplomat, unable to extract any information from his counterparts in the Foreign Office. Britain and China pledged secrecy last September when they announced they would begin negotiations on Hong Kong’s future to remove uncertainty. Much of the colony reverts to Peking under 19th Century leases that expire in 1997.

So far both sides have strictly

observed that pledge. Britain’s acute sensitivity was obvious recently when the Government testily denied a report published in Hong Kong that it had already implicitly conceded sovereignty to China.

The Government went out of its way last week, when a highpowered Hong Kong delegation was in London for talks with British leaders, to dispel any suggestion of a sellout.

Two official statements in one day reaffirmed that Britain was seeking a settlement acceptable to Hong Kong as well as to China and that the views of the colony’s 5.2 million inhabitants would be taken into account at all stages of the negotiations. The public reassurances followed an announcement that a second stage of negotiations — “a detailed phase” in the words of a British spokesman — would begin in Peking on July 12.

This rare public pronouncement was regarded by diplomats as the first significant indication of progress.

“It’s a step in the right direction,” said one British source. “We’ve been having talks about talks. Now we’re getting down to substantive talks.” Just what broke the stalemate is, of course, a secret. According to the “Far Eastern Economic Review,” it was a letter from the British Prime Minister, Margaret Thatcher, to China’s elder statesman, Deng Xiaoping. The magazine said that Mrs Thatcher indirectly acknowledged Chinese sovereignty over the colony. The Foreign Office in London protested that this did not represent the British position on sovereignty, but at the same time refused to confirm or deny that Mrs Thatcher wrote to Mr Deng. Western diplomats said it was unlikely that Mrs Thatcher would concede sovereignty so early in the negotiations, but they said that she could have hinted that sovereignty

would not be a stumbling block. They felt Britain could not realistically expect to maintain sovereignty over the colony after 1997, when the 99-year leases covering Hong Kong’s New Territories run out.

China insists that the treaties are not valid, nor those ceding Hong Kong’s main Victoria Island and Kowloon Peninsula to Britain in perpetuity. “The question of sovereignty is a red herring,” said Professor Stuart Schram, a Chinese expert at London University. “Britain can’t really argue the sanctity of unequal treaties. Anyway what they will be left in 1997 is hardly viable on its own.” Professor Schram expected that the negotiations would revolve around what sort of transitional arrangements could be worked out and how long a British presence could be preserved. Hong Kong’s British Governor, Sir Edward Youde, joined the negotiations this week, strengthening the impression that the talks are moving into a decisive phase.

British officials indicated months ago that Sir Edward, a Chinese-speaking former British Ambassador to Peking, would reinforce the negotiating team when the time was ripe. The Governor no doubt discussed negotiating strategy when he had talks in London early this week with Mrs Thatcher, with the Foreign Secretary, Sir Geoffrey Howe, and with other senior officials.

He headed a delegation of nine Hong Kong Executive Council members who came to tell Mrs Thatcher how they viewed the future and what safeguards they felt were necessary to preserve their capitalist enclave if and when it is swallowed up by the world’s biggest Communist State. The delegation, ranging from industrial magnate, Sir Sze Yuen Chung, to American-educated businesswoman, Lydia Dunn, never let on what transpired. It, too, observed the code of silence. The members, invited to sit on the colony’s Cabinet, represent the broad industrial base that would suffer if China ultimately decided the free enterprise of offshore Hong Kong was not compatible with the Communist society on the mainland.

Though China said at the outset it wanted to preserve Hong Kong’s prosperity and stability, the uncertainty has depressed the jittery stock market and made property prices collapse. Diplomats said it would be in Peking’s interests to maintain Hong Kong as an international trading and financial centre because it is an outlet for 40 per cent of China’s trade.

Not everyone on the Executive Council is convinced, even though a Chinese Communist Party Politburo member, Xi Zhongxun, told a Hong Kong delegation visiting Peking in May: “We will not change the capitalist system ... we must maintain two systems.” One prominent Horig Kong leader, Hilton Cheong-Leen, suggested that China should be allowed to regain sovereignty but that Britain and local Chinese administer the territory for 30 years.

China has not given any clue if this might be acceptable. British politicians will be watching the negotiations as closely as the people of Hong Kong.

Some Right-wing members of Mrs Thatcher’s Conservative Party are worried that failure to secure an agreement satisfying the people of Hong Kong could lead to a big influx of Hong Kong Chinese into Britain.