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an over-simplification to say that China does not recognise the Lease.
But the present Chinese Government has stated that Hong Kong as a
whole is Chinese territory, temporarily under British administration,
a situation which must be rectified 'when the time is ripe'.
By far the most
4. The Chinese Government are thus careful to give away nothing on
their legal position. But they have made it clear that they do not
seek an early change in the status of the Territory.
important factor for them is their reliance on Hong Kong for a major
proportion of their foreign exchange earnings; they also made
extensive use of its port facilities and financial and commercial
institutions. They could not at present administer the Territory and
retain these benefits, which depend on Hong Kong remaining outside
the Renminbi currency areas and its access to foreign markets. Even
during the Cultural Revolution, the Chinese Government did not want
a take-over. Improved relations with Britain in the 1970s have led to
a friendly, practical relationship with the Hong Kong Government coinciding with greatly increased Chinese communist investment in the
Territory and closer economic links with Guangdong Province.
5.
The
Hong Kong is a delicate political issue for the Chinese.
maintenance of colonial rule on Chinese soil is for them a source
of international embarrassment, and there is some evidence of
opposition to it inside China. It is inevitably linked with the
re-integration of Taiwan and possibly other terra irredenta. There
are implications for the Chinese position on other 'unequal' treaties
(especially those with the Soviet Union). They will thus reserve
their position on Hong Kong, while keeping a close watch on stability. They have given generalised assurances to investors and implied that
they foresee no early change in the capitalist system.
In 1979,
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