TNAG-0848-FCO40-1058-Future-of-Hong-Kong-New-Territories-leases-1979 — Page 60

CONFIDENTIAL

commitment to friendly relations with Britain and the avoidance of confrontation

with the authorities in Hong Kong. Such attitudes are prompted, it would seem,

by a growing awareness of the economic benefits to be derived from the

Colony. The value of Chinese exports to Hong Kong steadily increased (Chinese

goods now account for 20.3% of all Hong Kong's imports; only Japan supplies

more, 20.9%), and the foreign currency so earned (now about one third of

China's foreign exchange is earned in Hong Kong) became a major source for

financing the rehabilitation of a Chinese economy recovering from the chaos of

the Cultural Revolution. The climate of relations between China and Hong Kong,

therefore, was determined by a recognition of the need for maintaining the

status quo and economic stability.

7. The emergence of a new style of Chinese foreign policy was marked by two

major events towards the end of 1971 and early in 1972. On 25 October 1971 the

United Nations General Assembly voted to admit the representatives of the People's

Republic of China to the UN and on 13 March 1972 China and Britain announced

their decision to raise the level of their respective diplomatic representatives

from Charge d'Affaires to Ambassador. These events contributed to China's

breaking out of the self-imposed isolation of the Cultural Revolution and

promoted a foreign policy which defined more clearly the Chinese attitude

towards Hong Kong. A letter of 8 March 1972 to the UN Committee on Decolonisation

signed by the Chinese Permanent Representative Huang Hua (now Foreign Minister),

remains the most authoritative statement to date of the Chinese view of the

status of Hong Kong. It echoes the view expressed by People's Daily in March

1963 and clearly establishes the ground rules for Chinese policy towards Hong

Kong. The letter maintains that Hong Kong and Macao fall within the "category

of questions resulting from the series of unequal treaties left over by history",

and should not, therefore be considered as colonial territories:

"Hong Kong and Macao are part of Chinese territory occupied by the British and Portuguese authorities. The settlement of the questions of Hong Kong and Macao is entirely within China's sovereign right and does not at all fall under the ordinary category of 'colonial territories'.

CONFIDENTIAL

/Such

Page 60Page 61