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collapse of Hong Kong would undermine the prospects for peaceful
re-unification with Taiwan; it would do untold damage to the
efforts of modern economic development at home and undermine its
policies in the Asia-Pacific. Correspondingly, and unlike the
British government, the Chinese have everything to gain from a
smooth transfer of authority. Indeed it could be argued that it
has become central to Deng Xiaoping's strategy at home
abroad. Although Hong Kong has become increasingly important in
the reform and the opening up of the Chinese economy since these
were first begun in December 1978, it has acquired even greater
significance since the end of the Cold War. Deng's response to
the collapse of Communism in Eastern Europe and the former Soviet
Union has been to stress that the continued survival of the
Communist regime in China depends on accelerating the rate of
economic development so as to increase the prosperity of the
Chinese people and to strengthen the state in the long run. This
can only be achieved by continued economic reform at home and by
opening the door still wider to the international capitalist
economy and especially to deepening the process of economic
integration with the dynamic economies of the Asia-Pacific. Hong
Kong is absolutely critical to all of this. Quite simply Deng
cannot afford to allow the Hong Kong experiment to fail without
putting at risk his whole strategy for the development of his
country and the survival of his Communist Party in its present
form.
It is perhaps that fundamental
coincidence of interests
between the two sides that accounts for the progress that has