BRIEFING FOR THE SELECT COMMITTEE ON DEFENCE: HONG KONG
Introduction
1.
Hong Kong dot on map but over 5 million people (half million
in 1945). World's third largest financial centre. Probably now
Britain's biggest export market in Asia (overtaken Japan).
Historical Background
2.
China traditionally resisted Western overtures, restricting
trade to a few controlled centres, eg Canton. But China's
weakening circumstances and growing pressure from Western powers
for greater trade openings led China to agree reluctantly to
establishment of European concessions/semi colonies, eg Shanghai,
Hankow and Dairen. Chinese fear of encirclement.
Hong Kong's Origin
3.
Set against above background. Part of scramble for rival
footholds. Opium war. Unequal Treaties. Treaty of Nanking 1842
(cession of Island), First Convention of Peking 1860 (cession of
Kowloon), Second Convention of Peking 1898 (New Territories Lease).
Order in Council limits Governor's powers in New Territories to 1997.
China's attitude towards Hong Kong
4.
Chinese regard whole of Hong Kong as Chinese territory.
Macao and Taiwan too. Strong political principle.
5.
But economic advantages of status quo also compelling:
40% Foreign Exchange
Investment
Use of facilities
Training
Import of Technology
Feeder for Special Economic Zones (SEZ).
/6.