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launched straight into this point when I met him. produced an interesting variant of China's traditional position on Hong Kong. Although, he said, China's view that sovereignty belonged to China would not change, Hong Kong had a special status. This would be respected in any future political arrangements; whatever happened, investment in Hong Kong would be protected. In further conversation he spoke of the possibility that capitalism might continue in Hong Kong until the end of this century and into the beginning of the next. He did not, however, commit himself on the political framework within which this capitalism would be operating; nor would I have expected him to do so.
10.
Mr Deng's formula was, I am sure, intended to be reassuring. At one point he formally requested me to tell investors in Hong Kong to "put their hearts at ease". I have since done so to the accompaniment of a small jump in the stock market. I did not, however, make the point that Deng also spoke of security of investment despite political changes. A Hong Kong in which the present economic system is allowed to continue but under some, as yet undefinable, new political umbrella, is a possible long-term solution. But it would not be a reassuring prospect for investors now. The political environment cannot be separated from political control and confidence in its continuity With the sudden shifts which have taken place in the Chinese political scene over the last two decades, nobody could have confidence in an assurance about protection of investment in an environment controlled by China
at any rate unless coupled with specific assurances about the length of time before any change was contemplated.
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11. Deng's assurances followed closely, and were explicitly linked with, what has recently been said about China's future relationship with Taiwan. People here would be disconcerted at Hong Kong being coupled with Taiwan in any way, since Taiwan is clearly a priority target for Peking. Moreover such assurances will not be credible until they have been demonstrated in practice. Memories about what happened in Tibet, with its particular form of special status, are long. Until and unless there is a long period of political stability in China, or special status is shown to mean something tangible and lasting in the case, for instance, of Taiwan, protestations by China that Hong Kong will have a special status in which investors are protected will not raise confidence; they could indeed do the opposite. I doubt if any of this
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