TNAG-2119-FCO40-3025-Future-of-Hong-Kong-general-1990 — Page 127

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WHO LOST HONG KONG: 35

Nevertheless. the New Territories lease had become a psychological problem. Bv 1979. both local businessmen and prospective foreign inves- fors were increasingly asking what would be the legal status of their existing and proposed factories a high-rises in the New Territories atter June 29997 The fact that China was saving the problem find not exist because the New Territories lease was nuil and void was insufficient. Clearly, something needed to be done to reassure private leaseholders that they would not lose their property. The challenge for British officials was to find a way of finessing the problem by reassuring investors without ruffling the Chinese. Once this was ac- complished. Hong Kong's status would remain unchanged well past 1997—something clearly de- sired both by the leaders of China and by the people of Hong Kong.

The Portuguese had already shown the way. In the mid-1970's they had repeatedly acknowledged that the tiny colony of Macao, on the opposite side of the Pearl River estuary. was sovereign Chinese territory, and had offered to leave. The Chinese had responded that they wanted the Por- tuguese to continue running the place indefinite-

•

The two parties put all this in a formal understanding in February 1979. The British could have tried a variation of that approach, with virtually no risk to Hong Kong.'

Indeed. by late 1978 Dr. David Owen, then the Briush Foreign Secretary, had already concluded that the best way to solve the 1997 issue was to offer sovereignty over all of Hong Kong to China. In an interview this summer. Owen said that he had planned to make such an offer during an official visit to Beijing scheduled for the spring of 1979. In return, he had planned to ask China to allow Hong Kong to be run either by the existing British colonial government or by a new, local administration. China could have terminat- ed such an agreement by giving several years'

notice.

But preceding Owen to Beijing, on the invita- tion of the Chinese government, was Sir Murray MacLehose. And in Sir Murray's briefing papers- all presumably approved by Owen-was a very different proposal.

IV

N THE morning of March 29, 1979.

ON

Deng Xiaoping, China's paramount leader, in the Great Hall of the People. With him were two of the Foreign Office's leading China hands-his political adviser. David Wilson (now governor of Hong Kong), and Sir Percy Craddock, Britain's ambassador to China—and Sir Y.K. Kan, the sen- ior Chinese political figure in the colony. What occurred at the Deng-MacLehose meeting is still the subject of dispute. According to many pub. lished accounts, Deng told MacLehose that China

had already decided to take back all of Hong Kong in 1997. This. however, is simply false, and may indeed be a species of after-the-fact disinformation spread by British officials to suggest there was nothing they could have done to save Hong Kong. From an exhaustive checking of British and Chi- nese sources it is possible to reconstruct a more reliable account of the key moments of the meet-

ing.

The Chinese did not raise the question of 1997: the British did. MacLehose introduced the issue by telling Deng that the looming deadline on individual land leases would soon start undermin- ing investor confidence. He recails saving to Deng. "We have to get rid of the date in these leases. MacLehose then unveiled a British proposal for doing this, something for which Britain was ask- ing China's approval.

Deng's response to MacLehose s expressed con- cern about the uncertainty generated by 1997 was to issue a reassuring, 'Tell your investors to put their hearts at ease. He reiterated China's satts- faction with the status quo, and indicated that he considered 1997 to be irrelevant. China, he said, would take Hong Kong back some day, but it alone would decide when. In short. Deng recon- firmed China's longstanding policy on Hong Kong.

But for whatever reason. MacLehose at that meeting did not explain the British proposal in detail to Deng, and Deng, in turn, failed to grasp it or to approve it. So British diplomats went back to the Chinese in the following weeks to explain the proposal and to press the Chinese for their approval. Chinese officials were mystified. then flustered, and finally alarmed: to extend the sub- leases would imply an extension of the New Territories lease itself. Ultimately, the Chinese concluded, the British wanted them to endorse the continuation of the "unequal treaties: for the prickly and nationalistic Chinese, this was equiv. alent to implving that Hong Kong was sovereign British territory. And this was the one thing that no Chinese leader could ever accept.

By the early fall of 1979. the Chinese had formally and firmly rejected the British proposal. But what sealed Hong Kong's fate was a warning. never before revealed, that China included with its rejection. In unmistakable terms, China told Britain that it must not unilaterally take any legal action regarding the 1997 "deadline. ̈`

The British government's China hands had thus trapped themselves. Because of their ineptitude, they had not merely presented the Chinese lead- ership with a proposal it was compelled to reject; they had also provoked the leadership into for-

The Chinese residents of Hong Kong have never demanded self-determination and have always subscribed to the abstract idea-even while abhorring its ultimate, practical implica- tions-that Hong Kong is part of China.