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The Institute for the Study of Con
Macau as well as to Taiwan. Peng was reported to have urged the citizens of all three territories to "study" the draft constitution as a source of enlightenment and encouragement.
There is little reason to doubt that Deng gave hints of similar possibilities to Mrs Thatcher at his meeting with her. Indeed, he may well have put a third negotiating card on the table: a renewal of China's request, made but not pressed more than once in recent years, for some form of official Chinese representation in Hong Kong (meaning a resident envoy) in the near future.
The significance of these statements will be analysed later when the possible lines of a settlement are examined more closely. At this stage it is sufficient to make two comments. First, the statements do not preclude further pledges by Peking to encourage a flagging Hong Kong "goose" to continue to lay. Secondly, they conform with the two essential threads that we identified, at the outset of this section, as pervading and shaping China's perceptions of its interests in its attitudes to Hong Kong. Between the insistence on a principle and the recognition of what is practical and expedient, there always has been, and is, room for flexibility.
THE BRITISH VIEWPOINT: BURDEN, INTEREST AND OBLIGATION
If, as China is clearly demanding, sovereignty over the whole of Hong Kong formally reverts to China in or around 1997, the United Kingdom might be excused for looking forward to this event as the laying down of a burden—a burden to be laid down with considerable pride and some regret, but also with a measure of relief.
It would be easy enough to write a history of Hong Kong in terms solely of the territory's recurrent irksomeness to the foster-country. Throughout the 19th century occasions were not lacking when Whitehall's earliest misgivings about the wisdom of taking over this miniscule spot on the coast of South China seemed to be justified. There were the early worries caused by the Colony's chaotic finances; the aggravation of being subjected repeatedly to the clamour with which the "privateer" traders pressed their (often dubious) case in Lon- don; and annoyance at the tardiness which Hong Kong showed in tackling urgent problems of law and order and public health.
Similar instances can be cited from the current century: disagreements, sometimes protracted ones, over who should pay how much for what; differ- ences of view over labour problems and labour conditions in Hong Kong, in the 1920s and the 1960s; and, of course, the disquiet felt in Britain about Hong Kong's role as a producer of textiles. But perhaps the heaviest aspect of the burden since World War II has been psychological: and incessant and nagging awareness of the anomaly of Hong Kong.
One aspect of the anomaly is that a capitalist business community, serviced by an administration still largely inspired by 19th-century laissez faire principles, should have survived and prospered on the edge of the largest communist country in the world. Moreover, although never regarded as a colony in the true sense of the world, Hong Kong has retained its colonial status and constitution despite Britain's withdrawal from empire in all other parts of the world. To
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quote another metaphor, it has remained “isolated, high and dry", but still alive, on the beach long after the imperial tide has receded.
The oddity has been more apparent, and more disconcerting, to Labour governments in Britain than to Conservative ones. Indeed, for some socialist politicians who have visited Peking in recent years, it has been a distinct and educative jolt to discover that their hosts were quite content to let things be in Hong Kong so long as it suited their purposes to do so. (An even sharper surprise lay in store for the Portuguese post-Revolutionary leaders who in 1974 offered Macau back to China-the offer was politely but firmly refused.)"
The complexities arising from this situation undoubtedly weigh heavily on the shoulders of the present Governor of Hong Kong, Sir Edward Youde, as indeed they did on his redoubtable long-serving predecessor. More to the point, for purposes of assessing British attitudes, is the fact that the ending of the anomaly of colonial status is not in itself a repellant prospect for Whitehall to contemplate. In fact it has its attractions.
From this it follows that the transfer of sovereignty to China, in or around 1997, should certainly not be an insuperable difficulty; it can even be perceived as a predictable British aim, provided that any legal snags can be ironed out and, more important, that a satisfactory formula and framework for a post-1997 administration can be devised and agreed. Britain must be expected to “stand pat" on the validity of the treaties as justifying British rule up to 1997 (as Mrs Thatcher indicated when questioned about her visit to China); but as regards what happens after 1997, Britain will have to follow the logic of two proposi- tions that it has already accepted: (a) That it is desirable that Hong Kong should be preserved as a viable territorial entity; and (b) That this will be dependent on the New Territories remaining part of that entity. The conclusion is that the cessions and the lease hang together: when the lease goes, the cessions will go.
So much for one concept that will influence the attitudes of the British representatives at the negotiating table: resignation to relinquishment of sovereignty. Next we come to another factor: the economic advantages which Britain now derives from Hong Kong and the extent to which Britain can be expected to seek to retain a share of, if not all, those advantages.
Economic issues
In contrast to the plethora of estimates and figures that are regularly produced to illustrate the Colony's economic importance to the People's Republic, there has been a remarkable reticence—and a corresponding dearth of data—when it comes to quantifying the financial and other benefits that flow from Hong Kong to London. Admittedly, compared with the "specie-for-opium" dividends of the mid-19th century (when Hong Kong also had strategic and diplomatic utility in British eyes), the benefits now are relatively small. But they do exist.
Britain's trade balance with Hong Kong is adverse. In 1975 the deficit was £147 million. But in the same year a Foreign Service official in London admit- ted that the annual surplus on invisible trade was in the region of £200–£300 million and might even be higher." It must be assumed that the same pattern of
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