TNAG-1254-FCO40-1587-Third-countries-and-the-future-of-Hong-Kong-1983 — Page 139

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much lower in value, which has given the, PRC a favorable balance of trade

that, along with remittances by Hong Kong Chinese to relatives in the PRC,

has recently accounted for around 30 to 40 percent of China's overall foreign

exchange earnings. A well known adage in the region states that Hong Kong

is a unique machine capable of turning PRC pigs and chickens into U.S.

dollars.

Once Great Britain withdrew most military forces east of the Suez

Canal during the 1960s, Hong Kong's security rested even more on Chinese

restraint and goodwill rather than on the very limited power of British

forces in the colony. There was considerable uncertainty over the future

of Hong Kong fifteen years ago when violence associated with the most

radical phase of "Red Guard Diplomacy" during China's Cultural Revolution

threatened to spill over and jeopardize stability in the colony. As

Maoist influence faded, however, increasingly cordial, practical and ex-

tensive ties developed between the colony and the PRC. Transportation

markedly improved and visits increased, encouraged by official representa-

tives of both sides. The British Governor of Hong Kong made his first

trip to the PRC in March 1979, and Chinese leader Deng Xiaoping told him

that "investors in Hong Kong should put their hearts at ease" over Chinese

intentions toward the colony.

Subsequently, British officials and Hong Kong business leaders re-

peatedly sought assurances from Chinese officials regarding the future of

the territory after the scheduled lapse of the 99 year lease on the New

Territories in 1997. PRC officials freely echoed Deng's instruction and

pledged that Hong Kong's social and economic system would not be adversely

affected; they implied that China was not anxious to push the British out

and govern the territory directly.

}