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The Institute for the Study of Con
the world in the early 1970s. The formidable political acumen of Zhou Enlai (Chou En-lai) came to the fore, to give expression to a new outlook on external relations and a new concept of internal development. In 1971 China joined the United Nations. Next, a cool appraisal of the Soviet Union as a major threat to the People's Republic led logically to the rapprochement, or modus vivendi, contrived with the United States; to support for a more united Europe too, as a bulwark against Soviet "hegemonism"; and to the pursuit of more cordial relations with Britain. Hong Kong fitted into the changing pattern, and throughout the 1970s was to benefit from it.
In March 1972 China roundly informed the world that Hong Kong was no longer a colonial problem, and should not be treated as such. Huang Hua, then the Chinese permanent representative at the UN (and later Foreign Minister) requested the Special Committee on Colonialism to delete Hong Kong and Macau from its list of territories for which independence should be sought. "The settlement of the question of Hong Kong and Macau is entirely within China's sovereign right", Hua's message stated. These questions would be settled "in an appropriate way when conditions are ripe”.
Parallel with a steady improvement in Sino-British relations, which resulted in the exchange of full diplomatic missions in 1972, relations between Hong Kong and the provincial authorities of Guangdong became steadily closer and more harmonious. In 1973 there was an exchange of visits between Hong Kong water engineers and their opposite numbers to the north of the border, which led to an agreement on an increased supply of water from China; further exchanges followed-sporting and cultural and in the areas of trade and tech- nology also.
Undoubtedly, the arrival of Sir Murray MacLehose as Governor in 1971 was welcome to the Chinese leadership. As a former diplomatist, he was someone well known to them; as Governor, they knew they could count on him to heed vital aspects of their national security-for example, by ensuring that the Soviet Union remained barred from establishing any operational "presence" in the Colony and by reducing the scope for any display of Nationalist (Taiwan- promoted) sympathies and aspirations. Internally, the Governor's housing and social policies must have met with Peking's approval, for these policies meant a squarer deal for the mass of Hong Kong's people-the 98 per cent Chinese; at the same time they could be sure that the Hong Kong government would not allow elective democratic processes (at the time of writing confined to the Urban Council and the more recently formed District Boards) to grow to a point which would threaten to infringe China's "sovereign rights.”
The eye which China cast on Hong Kong changed in the course of the 1970s from a correct if still somewhat baleful stare as the decade opened to glances of positive benignity as it closed. The process of change was speeded and given new meaning by the momentous events in China in 1976-77: Mao's death and the arrest of the Gang of Four in 1976; the second reinstatement in his party posts of Zhou Enlai's disciple Deng Xiaoping, in August 1977; and the subsequent formulation of the Four Modernisations Programme (in the fields of agriculture, industry, technology and defence).
China's plans for industrial modernisation in Guangdong Province, notably
Prospects for Hong Kong
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the development of new industrial complexes just north of the Hong Kong border (including the Shum Chun Special Economic Zone), gave added impetus and urgency to China-Hong Kong collaboration. Rail, air and sea communications between Canton and the Colony have been substantially im- proved over the past few years, and the Chinese authorities have welcomed joint development projects in fields ranging from electricity generation to the building of hotels.
When Deng gave his famous message to Sir Murray MacLehose during the Governor's visit to Peking in 19795 (“Tell investors in Hong Kong to put their hearts at ease"), he may well have thought that this resounding reassur- ance-combined with his explicit welcoming of Hong Kong's contributory role in the Modernisation Programme and reinforced by the tangible and visible evidence of collaboration now arising in concrete and steel—should suffice for the next five years or so. After all, the basic Chinese position was clear enough and had been spelt out often enough: (a) Hong Kong is part of China and will revert to China in due course; and (b) The way that reversion is arranged and timed will be through negotiation, and the transition will be such as to ensure that Hong Kong continues to fulfil its traditional and accepted economic role.
If Deng thought this was enough, he was proved wrong. China's equanimity about the approach of 1997 was not matched by a comparably relaxed disposi- tion in the Colony. It clearly suits China to keep its options open-and Peking has many preoccupations other than Hong Kong to demand its attention. Hong Kong, however, felt in need of—and pressed for-some further pledge as it entered 1982, the year that would mark the beginning of the 180-month countdown to 1 July 1997. The message reaching Peking-in various ways -from the business community of Hong Kong (a community that includes Chinese communist entrepreneurs engaged in capitalist ventures) was roughly this: "Unless you reveal your intentions more clearly, there is a danger that capital will flee from Hong Kong as confidence ebbs; the goose that lays the golden eggs, for you as well as for us, is being put at risk”.
China responded, but not in the way that Hong Kong had hoped. There were restatements of the old position of principle, and restatements of practical reassurance. But in putting one or two new cards down on the table (as requested), Peking was conscious not so much of the need to maintain confi- dence in Hong Kong as of the opportunity to establish a bargaining position in advance of the Anglo-Chinese discussions on the future of Hong Kong.
It was at mid-year that China gave its semi-public hints of ways in which it might envisage post-1997 Hong Kong fitting into a Chinese national framework. The two most notable hints were, firstly, statements attributed to Deng when he received a party of a dozen prominent Hong Kong citizens in mid-June; and secondly, extracts from a speech made by Peng Zhen, a senior Politburo member,' in July.
According to reports reaching Hong Kong, both leaders drew attention to provisions in China's new draft constitution which would authorise "special administrative arrangements" for Special Economic Zones in parts of China where an exceptional status could be justified. And both men were said to have pointed out that such arrangements would be applicable to Hong Kong and
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