TNAG-2714-FCO40-3920-House-of-Commons-Select-Committee-on-Foreign-Affairs-enquiry-1993 — Page 178

THE FOREIGN AFFAIRS COMMITTEE

vii

1.10. Confidence, however, will continue to suffer. Until recently the People's Republic of China appeared to be an economically progressive and increasingly responsible power which was seeking to rejoin the international community. It has been pursuing an "open door" policy which has encouraged substantial investment by Western nations and has done much to build mutual confidence. Serious attempts seemed to have been made to establish the rule of law. Although there had been very little political reform, China seemed set on a path of gradual liberalisation. This perception, however, has been violently shattered. The People's Republic has demonstrated again its historically persistent unpredictability. We believe therefore that the British Government must review the specific implementation of its obligations towards the people of Hong Kong. In this Report we consider how these obligations should now be honoured. We look, first, at the Joint Declaration itself and its implementation through the Basic Law; then we turn to the administration of Hong Kong up to 1997 which is primarily the responsibility of the Hong Kong Government. Thirdly, we look at the responsibilities of the British Government. Finally, we address the increasingly intractable issue of the Vietnamese Boat People.

IL THE JOINT DECLARATION AND THE BASIC LAW

2.1 We have already emphasised that the Joint Declaration is a treaty which binds both of the sovereign powers who signed it and is registered at the United Nations by the two governments in accordance with normal practice. It requires both Britain and the People's Republic of China to secure the stability and prosperity of Hong Kong, to ensure a smooth transfer of sovereignty in 1997, to provide Hong Kong, once it is part of China, with a separate legal, economic, administrative and social system and to ensure that this pattern of separation including a high degree of local autonomy is preserved for 50 years after 1997.

2.2. Recently, however, there have been calls, in Hong Kong especially, that the Declaration should be torn up, and that the British Government should renegotiate it, or even decide unilaterally on Hong Kong's future. Such calls are understandable, although it is not so much the terms of the agreement, as the credibility of one of the parties to it which has been extinguished. For example, the Chinese Government's ruthless suppression of calls within China for progress towards democracy, and the extreme language of its denunciation of Hong Kong support for those calls, seriously challenges the belief that China will now and even more after 1997 encourage the development of democracy in Hong Kong.

2.3. We have concluded that, despite what has happened and the inevitable calls to tear up the agreement, reneging on the Joint Declaration and breaking off all negotiations with China for the foreseeable future is simply not an option. The future of Hong Kong has to be negotiated with the Government of China. There is no possibility of the UK Government ceasing to discuss the matter further and depriving the People's Republic of any access to Hong Kong. We have no power in law to stop China taking control of the New Territories in 1997 and no practical ability to stop them controlling, through such means as the food and water supply, Hong Kong Island. Without the Joint Declaration nothing would have been achieved at all to guarantee the future security of the Colony and its people. We would have to start again to negotiate from scratch before 1997, and much of what has already been achieved in the Colony's favour will have been discarded. When the dust of the horrific turmoil has settled, the PRC will surely want to preserve the "goose that lays the golden egg". Historically the Central People's Government has always been reluctant to undermine Hong Kong for precisely this reason. China and Hong Kong are now each other's largest trading partners. More people are employed by Hong Kong companies in manufacturing in mainland China (about 1.5-2 million) than in Hong Kong itself (about 1 million).2 There are plans for major infrastructural improvements in communications between Hong Kong and Guangdong Province, which, if realised, can be expected to encourage much closer ties; Hong Kong accounts for one third of China's foreign exchange; for 70 per cent of investments in China and for several million jobs in Guangdong Province across the border. Although only twice the size of the Isle of Wight, Hong Kong ranks eleventh in the league of world trading nations, has the largest container port in the world and is one of the world's leading financial centres. The average per capita income of its population, at US$9,600, is second in Asia only to Japan and its economic growth ratio has been averaging 8 per cent per year. The PRC knows well that this dazzling economic achievement is now at serious risk because of their horrifying actions, so jeopardising

'Evidence p 39.

2 Q 106.