economic practices no one really knows their true positions except that they employ a work force of 150 million that cannot be simply made unemployed and that about a third of the state budget is allocated in one way or another in providing them with subsidies. Meanwhile the central budget runs large deficits and the state lacks financial institutions capable of controlling the economy. China's phenomenal economic growth rates that have averaged around 10 per cent per annum for the 1st fifteen years have been due almost entirely to the non state sector. It is here where the impact of hong Kong has been the greatest. Consequently, by placing Hong Kong in effect at the heart of his political-economic strategy for enabling the Communist Party to survive, Deng can hardly allow it to disintegrate. At the same time as nationalistic passions replace those of Maoist ideology it is to be expected that Hong Kong's high profile will also excite ill will in certain circles in China. It should be recognized, however, that those
those who regard Hong Kong most favourably are the modernizing forces within China reformers, the younger technocratic elites, the officials and entrepreneurs of the coastal regions especially, but also many of the regions further inland and particularly the young in China who seek to emulate Hong Kong life styles.
the
Meanwhile Britain's obligations regarding Hong Kong have also been affected by the consequences of Tiananmen and by the ending of the Cold War. The ramifications of these events have demanded that Britain first take steps to restore confidence in Hong Kong (which of necessity antagonised Beijing) and second that HMG nourish the nascent political system that is emerging within the territory. This it can best do by trying to facilitate the conditions under which elections can
elections can be held openly and fairly so as to produce as truly a representative legislature as possible without contravening the Basic Law laid down by China.
1997 and Beyond
Providing that Britain leaves behind a political framework in which the exercise of political autonomy is feasible it will then be up to the people of Hong Kong to display the courage and independence of spirit to establish that autonomy. But it is at that point after 1st July 1997 that Britain will be called to play a new role regarding Hong Kong. Despite Chinese protestations that from that point HK will be an entirely domestic Chinese affair, the Chinese government is bound by the terms of the Joint Declaration (that it itself has recognized as an international treaty) in which it undertook to treat HK in particular ways. As the co-signatory Britain is duty bound to do its best to see that the terms of the treaty are followed. Indeed the fact that the sino-British Joint liaison Group is due to continue meeting for the next three years may be seen acknowledgement of continuing legitimate British interest.
as
The Foreign and Commonwealth Office will presumably set up
7