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for what were, to them, significant guarantees about the
Hong Kong economic system and its probable continuity
(capitalism well into the next century) without giving
away anything on political control. They probably still
think this type of general assurance should be sufficient,
although there are some indications that they are beginning
to realise this is not so. Their initial remedy for a
slide in confidence is likely to be to repeat the
assurances more forcefully and more directly to leading
investors in Hong Kong.
The Chinese View and problems for HMG
7. Chinese assurances were sufficient to boost confidence
when they were first made. But this was only because they
were seen as a first step towards more concrete measures.
They take no account of the legal problems of a finite
and diminishing period in the New Territories as regards
the future administration of land leases. Leases of Crown
land cannot be granted there for any period terminating
beyond 1997 without an unacceptable risk of legal challenge
Measures that would circumvent this problem would need at
least tacit approval from the Chinese. A way of dealing
with this problem was put to the Chinese in 1979 but
rejected.
8.
Chinese assurances appear to be based on the assumption
that the difficult question of political control after 1997
can be avoided for many years to come. They also imply tha
continuing prosperity of the economic system can be divorce
from the problem of political control. Neither is true;
Hong Kong's prosperity, and its value to China, depends on
it having:
a)
a different currency from China and one that is readily
convertible;
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/b)