CHINESE TAKE-AWAY

Robert Cottrell charts the

Foreign Office manoeuvres that gave away Hong Kong

Hong Kong 'THE history of foreign diplomacy with China', proposed one Victorian commen- tator, 'is largely a history of attempted explanations of matters which have been deliberately misunderstood.' The whimsic- al perspective is very much a British one. A contemporary Chinese would have guessed that the history of foreign relations with the Middle Kingdom had more to do with gunboats, opium and annexation.

Most of the territory which China lost in the 19th century was regained by the mid-20th, with the major exceptions of Hong Kong and Taiwan. Only Taiwan still holds out — the Nationalist government there maintaining that the mainland be- longs to it, rather than vice versa. Hong Kong is due to receive its final notice of intended repossession any day now, in the form of the first draft of a constitutional document in which Peking's law drafters will set down precisely how they think the territory should function as a 'Special Administrative Region' of China after• Britain has ceded it voluntarily in 1997.

Publication of the document, which Pek- ing calls the 'Basic Law' for Hong Kong, marks a decisive shift in the balance of political authority in the colony. After its contents enter the public domain, the principal test of acceptability for long-term policy decisions — even those taken under British sovereignty prior to 1997 — will become one of potential compliance with a law' which is China's law. As a result, though the colonial government may not quack like a lame duck, it will most certainly have to start walking like one.

China's post-1949 communist govern- ment is commonly said to have tolerated British rule for so long in Hong Kong because of the economic usefulness of maintaining the colony as a trading post. It would probably be truer to take the more oblique view that the economic usefulness of Hong Kong gave the Chinese govern- ment a reasonable excuse to relegate the issue of the territory's status to the sphere of wuwei, or inaction, at least for so long as Peking had more urgent issues to pursue. When Hong Kong was finally pushed to the top of China's political agenda at the

turn .of this decade, it was the question of sovereignty, and not foreign exchange, which shaped Peking's gut response.

P.ribr to the 1:982-84 negotiations with Britain which culminated in the agreement to restore Hong Kong, Peking's position had been that — if pushed — it would deny the validity of the three 19th-century treaties by which Hong Kong had been established, but that otherwise and for all practical purposes it would accept and work with the colony and the colonial government which those treaties had cre- ated. The only latent threat to this modus viveridi was that while two of the three treaties ceded pieces of Hong Kong in Perpetuity, the 1898 Convention of Peking assigned the part of Hong Kong known as the New Territories to Britain only on a 99-year lease due to expire on 30 June 1997.

Britain's decision that, when the New Territories lease ran out, it would relin- quish the whole of Hong kong,, resulted from some Of the most labyrinthine and secretive diplomatic contacts to have been undertaken by the Foreign Office in mod- ern times — so secretive that even so brief a .discussion as this One cannot attempt to Make sense of that diplomacy without the liberal use of surmise and Private informa- tion.

Looked at from Peking's viewpoint, the Hong Kong . negotiations were a raging success. China unilatefally declared the terms on which it viiould _resume the col- ony, threw out the British counter- arguments, and then even managed to indtic.e the British to work hand in hand with Peking in implementing Peking's own proposals, ,

How,. then, to account for Britain's apparent belief that the Hong Kong settle- ment also served Hong Kong and British interests? The Foreign Office would prob- ably answer demurely that the settlement was the best possible outcome 'under the circumstances', — by which it would mean that Hong Kong was militarily indefensible against China, that the Opium War treaties through which it was founded were morally repugnant if not necessarily invalid, and that its diplomats did well to reach a

graceful Compromise with the minimum of leverage.

. That would be the diplomat's view; the Politician's would be different. The British Government was immensely relieved to have declared a 'success'; a relief related directly to its worry about two million of Hong Kong's ethnically Chinese British Dependent Territories citizens equipped With familiar-looking blue passports proc- laiming Her Majesty the Queen's interest in the well-being of the bearer. The mere fact that these 'citizens' had been stripped of residency rights in Britain by successive nationality acts might not have dissuaded many from seeking sanctuary there, in the event that chaos and despair overtook their own territory. If international relations are best explained in terms of crude self- interest, then the politics of immigration deserve at least this footnote in the story of Hong Kong.

Britain's disposition to think the best of China, and trustingly to hand Hong Kong over to its safekeeping, can also be linked to broader diplomatic considerations. For even if China does maintain such deplor- able protégés as Pol Pot and Kim Il-Sung, even if its own people do endure the habitual repression of a totalitarian state, the West nevertheless cultivates friendship With Peking partly out of so far misplaced hopes for trade, partly in order to deter the daunting prospect of greater Sino-Soviet intimacy.

So much for rationalisation. The process by which the Hong Kong handover was agreed suggests that Britain's most impor- tant decisions were in fact its tactical ones, and that it ended up implementing China's terms mainly because it undermined its own preferred alternatives and was then not prepared seriously to fight the Chinese Proposal, which remained by default. By this argument, the first 'point of no return' along the putative road to 1997 would be the visit to.Peking by the last but one governor of Hong Kong, Lord — then Sir Murray. — MacLehose, in 1979. In the mid-to-late 1970s, Britain still had the option of trying to duck their pursuit of a definitive Hong Kong settlement altogether, relying instead on China's pre- sumed self-interest in preserving the status

quo. Could Britain. simply start to issue

New Territories, land leases extending beyond the 1997 deadline — preferably

with China's tinformally, obtained complic- ity — and allow investors to deduce the situation fOr themselves?

It decided not. With less than 20 years of the New Territories lease left to run, Lord MacLehose went to Peking and raised with the national leader Deng Xiaoping the question of whether Britain could extend its own Order in Council, the instrument by which the Crown governed the New Territories according to the terms of the Convention of Peking. Deng's immediate response was opaque. But having been compelled to consider the question, he arrived a year or two later at the answer. 'No.'

The MacLehose visit helped dictate the nature of the Hong Kong settlement by ruling out . the possibility of a non- settlement. It raised Hong Kong's priority as a Chinese political issue by serving notice that Britain would want an explicit legal agreement, not a meaningful silence or an understanding or an assertion — even though (as Britain must have known) China could only allow a full-dress deal to go in one direction, that of a transfer of sovereignty, since 'reunification of the motherland' formed a cornerstone of the Chinese constitution.

The second point of no return came with Mrs Margaret Thatcher's visit to Peking in the September of 1982. Sovereignty was by then on the back-burner, and the Foreign Office had hatched a scheme of convincing China to focus on the importance of a continuing British role in Hong Kong's administration after 1997.

Unfortunately, the Thatcher visit came just five months after the Falklands War, at a time when the Prime Minister apparently felt politically obliged to be belligerent on the subject of another Brit- ish colony at risk. She arrived in Peking tired and ill, wrangled unproductively with Deng for two hours, fell down the steps of the Great Hall of the People, and then gave a press conference in Hong Kong in which she declared that China's willingness to honour the Opium War treaties would be indicative of its willingness to honour other international agreements. 'The Chinese listened to her,' says one well- qualified observer, 'and thought "F— this for a lark".'

Had Mrs Thatcher been less assertive, China's leaders might have been more receptive. Instead, they came away with the impression that the British position was combative, and that any proposals aimed at retaining British administration would also be aimed at undermining Chinese sovereignty. They declared sovereignty in- divisible from administration, and another set of alternatives thus melted away.

The only argument for starting a fight over Hong Kong would have been a willingness to finish it — not by sending in the Royal Navy, but by allowing a stand- off to undermine Hong Kong's confidence to the point at which its capital fled and it became scarcely worth fighting for. But Britain, despite some early muttering, was not prepared to take the 'scorched earth' approach, as events were to show. In September 1983 Britain was still holding out for its administrative 'link' with Hong Kong, and was encountering an increasingly short-tempered Chinese re- sponse. The nerve of Hong Kong's money- men did indeed snap, and the local curren- cy went into free fall. In one sense, Britain's case was being proved before China's very eyes: try to kick us out, and watch what happens. But it was Britain, not China, which blinked. It broke the impasse by accepting the assumption that sovereignty would be transferred in 1997, and started to talk 'conditionally' about the basis on which this could be done; it also pegged the Hong Kong dollar to the US dollar at an exchange rate guaranteed by public funds, thereby neutralising part of its own 'scorched earth' argument by mak- ing the Hong Kong dollar's exchange rate a non-political phenomenon.

Ostensibly, Britain decided to back down because it did not feel entitled to place Hong Kong's immediate well-being at risk. But in addition, the British Gov- ernment could expect no thanks from its electorate for a 'virtuous' Hong Kong settlement; it faced only a downside risk, that a controversial or bungled negotiation could start to look very messy indeed. Britain's 'bottom line' for Hong Kong thus became, in negotiating terms, negative rather than positive. It would do almost anything to avoid a crisis. Conversely, China could achieve almost anything by threatening to provoke one, which is essen- tially what happened. By persuading Bri- tain that it would, if forced to choose, prefer a Chinese Hong Kong to a stable and prosperous one, China was able not only to impose its own settlement terms, tbhuetma.lso to persuade Britain to implement

A final demonstration of Britain's prag- matism — or malleability — is that it is now busy trying to prove diametrically the reverse of what it was five years ago trying to argue. It is reducing Hong Kong's British administrative 'link' from vital to vestigial status, while telling Hong Kong that it will be none the worse as a result.

The final act may well revolve around some superannuated Westminster gran- dee, of ceremonial rather than executive value, taking over the governorship of Hong Kong for a final, few years at the head of what will be in reality a Sino- British cbridominitim government.

British diplomats like to say of this transition process that, come 1997, 'the fiction that Hong Kong is part of Britain will be replaced by a fiction that it is part of China'. The art of fiction, however, has languished in modern China, mainly be- cause of the subordination of artifice to ideology. Perhaps Hong Kong will be allowed, nonetheless, to live on as a fiction of some sort or other. Whether as thriller or tragedy remains to be seen.

Robert Cottrell is Hong Kong correspon- dent of the Independent.