TNAG-1166-FCO40-1446-Future-of-Hong-Kong-1982 — Page 125

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This,

possibly a common airport, common nuclear power stations, common container ports all in action long before 1997. together with the conscious localisation policy of the Hong Kong Government will mean that by 1997 there would be a Chinese Government already operating in Hong Kong and the two now different systems controlling finance, trade and industry would have come much closer together so that by a natural process of osmosis a de facto unified greater Hong Kong (or if you like greater Canton) would be in existence and the de jure Government could then be negotiated fairly easily.

The second scenario is that the present Chinese Government does not last and that the left takes over again and that we go back to the conditions of the late 1950s or, even worse, the late 1960s and early 1970s. Paradoxically, that will almost certainly be a guarantee for Hong Kong's survival as a British colony. By 1995 Hong Kong will have something like 8 million inhabitants all of whom will be dedicated to free enterprise and who would be impossible for the Communist body politic to absorb. Even after thirty years, they are still having problems with Shanghai and Shanghai was nowhere near as big or as dedicated as Hong Kong to the spirit of Capitalist free enterprise. Obviously a Left Radical Government in China would have major economic implications for Hong Kong and would make Hong Kong's life very difficult but no more so than Hong Kong has already experienced and has learnt to live with and I would expect, under these circumstances, the rapid expansion of Hong Kong's industries taking over again from the present growth of the entrepot trade and the Hong Kong Government, with support from Westminster, carrying on much as usual into the 21st Century in spite of the expiry of the lease. There is already a precedent for this: In 1967 the Portugese tried to give Macao back to the Chinese Government which was then about as Left as it could be and the Chinese Government (very wisely) refused.

There is a third scenario which is very much more dangerous for Hong Kong and that is the decay of the central authority in China and the reappearance of smaller national Chinese states. Europeans tend to forget that although China has been unified for some considerable time, there is a greater difference between the southern and northern Chinese than between southern and northern Europeans. There is also a quite natural division by the Changjiang between north and south. One could envisage a China consisting of 3 different states. One north down to the Yellow river, one between the Yellow river and Changjiang and one south of the Changjiang. One could envisage also six different states. A state which would, say, only consist of the provinces of Yunnan, Guangdong and Fujian and be run by a warlord would have a very different view of the use of Hong Kong than the centralised state has now, and if this sort of division of China happened, Hong Kong will have major problems. But, of course, that problem would start immediately a southern state came into being and not just in 1997.

Ever since I have been here, Hong Kong has lived from hand to mouth. In the 50s and 60s businessmen lived by a three year cycle. If one wasn't reasonably sure to get one's money back within three years, one didn't risk investing.

This cycle

lengthened in the 70's but in my view has not really gone beyond a six year cycle. So, economically, I don't believe the date of 1997 will throw any large shadows until about 1992.

So please ask me the question again then.