Friday, 24 January 2014


"While Zhao was left to exchange politely pointed speeches with Thatcher about their 'valuable and stimulating' talks, Kim il Sung was down the corridor, toasting 'militant friendship' and 'the raging flames of war against common enemies' late into the evening to an applauding audience led by Deng Xiaoping and a roll-call of the Politburo." ... ... And then they let Thatcher slip on the ice on the steps of the Great Hall of the People. Lol

How Mrs Thatcher Lost Hong Kong: Ten years ago, fired up by her triumph in the Falklands war, Margaret Thatcher flew to Peking for a last-ditch attempt to keep Hong Kong under British rule - only to meet her match in Deng Xiaoping. Two years later she signed the agreement handing the territory to China


mARGARET tHATCHER'S plane landed in Peking at half-past one on the afternoon of 22 September, 1982. It was her second visit to China, the first having been when she was Leader of the Opposition in 1977.

She did not, according to one civil servant, find China very attractive: 'She was a great exception to the general rule among political and business leaders, that having reached Peking and had their tummies tickled, they are captivated by the place, seeing themselves as latter-day Marco Polo figures. When she went as Leader of the Opposition, she found it a rather unpleasant place governed by rather unpleasant people.'

The coolness was mutual. Her subsequent visit, the first to China by a serving British prime minister, was reported as the fourth item on Peking's main radio news that evening, deemed of less importance than a commentary on the Communist Party's recent national congress, a report on reactions to the congress among miners in Henan province, and the arrival in Xian of another foreign leader, Kim Il-sung of North Korea.

Thatcher's party included her principal private secretary, Robin Butler, her press secretary, Bernard Ingham, Sir Edward Youde, the newly appointed Governor of Hong Kong, and Alan Donald, Foreign Office assistant under-secretary for Asia and the Pacific. The entourage was an unusual one for a prime minister's overseas visit in that it failed to include the Foreign Secretary. One of the press party, Hugo Young, recorded that this was because, 'as the leader's aides casually suggested, she found it hard to be in the same room, let alone the same aircraft, as Francis Pym'.

Pym had proved insufficiently bellicose for Thatcher's purposes during the Falklands war that spring and summer, and they had scarcely talked since about Hong Kong. In the words of one official: 'The idea of sticking the Hong Kong file . . . which you might as well have called 'Proposal to Divest Sovereignty over Hong Kong to Foreigners' . . . the idea of putting that under Thatcher's nose in her hour of triumph was more than any foreign secretary could have borne.'

Belatedly, Thatcher had taken advice from diplomats whose logic she respected - Youde, and Sir Percy Cradock, Britain's Ambassador in Peking. They told her to expect that China would press for a resumption of the whole of Hong Kong in 1997; and that Peking wanted to turn Hong Kong into a 'special zone' of China, where the practice of capitalism would be permitted. They also warned her that Britain's hold on Hong Kong was more tenuous in practical terms than a reading of the 19th-century treaties might suggest.

Though Hong Kong Island and Kowloon had been ceded to Britain 'in perpetuity', there was no physical border between these ceded portions and the New Territories, and no way in which Britain could defend or sustain the ceded portions if China wanted to take them back together with the New Territories.

The Foreign Office proposed a counter-strategy founded upon a distinction between 'sovereignty' and 'administration'. It suggested that Thatcher aim to reach an agreement with China whereby Britain would cede a titular sovereignty over Hong Kong to Peking, in exchange for Peking's formal agreement to allow British administration to remain in place in Hong Kong beyond 1997. Thatcher eventually digested the proposal in principle more easily than the Foreign Office had feared. The over-arching requirement, she accepted, was for a settlement with China which gave the people of Hong Kong renewed confidence in their own territory's future.

According to one official: 'She did not for a moment think that Hong Kong was in any way comparable with the Falklands, despite the paranoia in the Foreign Office. There were many important differences, number one among them being, from her point of view, that if Britain had had to welcome every last islander and every last sheep from the Falkland Islands into Britain, then there would have been no political consequences for the person who had opened the door. If Britain had to accept even a fraction of the population of Hong Kong, it would be political suicide.'

Yet the Falklands cast a longer shadow than the Foreign Office was perhaps willing to concede. As the Prime Minister arrived in Peking, her heart was not quite with her head. In the absence of a strong foreign secretary, she was being left more than usually to her own instincts, and the afterglow of victory in the South Atlantic still smouldered.

However much political sense it might make to embark on a process which would end with a transfer of sovereignty over Hong Kong to China, Thatcher's instincts told her that title to Hong Kong was rightly Britain's - and that some sort of stand should be made.

From Peking airport, Thatcher was driven to the Diaoyutai State Guest House on the western side of the city for a brief rest and a change of clothes, then on to a ceremonial welcome at the Great Hall of the People and a preliminary meeting with her Chinese counterpart, Zhao Ziyang.

IT WAS not until that evening's banquet, with Zhao as host, that the main topic of the visit was first mentioned. Between toasts in maotai - the Chinese sorghum liquor, of which Clive James, also in the press party, observed: 'It has the same effect as inserting your head in a cupboard and asking a large male friend to slam the door' - Zhao delivered a short, oblique speech, saying: 'In our bilateral relations, there are problems left over from history that need to be solved through consultations.'

Thatcher, in her reply, cut through Zhao's politic circumlocution. 'We have not yet begun our discussions on Hong Kong,' she said. 'I look forward to pursuing this important matter with you tomorrow.'

But Zhao, too, was looking forward to the next day; and he was on home ground. When morning came, it was he, not Thatcher, who seized the initiative. In a corridor at the Great Hall of the People, outside the room in which Thatcher awaited him, he turned to a clutch of Hong Kong journalists and made an unexpected declaration. 'China', he said, 'will certainly take back its sovereignty over Hong Kong.'

A rustle of surprise rippled through the audience. 'However, in my opinion,' Zhao continued, 'the problem of sovereignty will not affect Hong Kong's stability and prosperity. Hong Kong should not worry about its future.'

'Why not?' called a voice from the press.

'Why should they worry?' replied Zhao. 'China will certainly take a series of policies and measures to guarantee Hong Kong's prosperity and stability.' With that, Zhao broke away to give Thatcher the same message in more detail.

The purpose of Zhao's seemingly casual disclosure was not merely to put on record China's intention of regaining control of Hong Kong, but also to show that China felt free to make decisions about Hong Kong without consulting Britain first, and to appeal directly to Hong Kong public opinion for support. As a departure from diplomatic etiquette it was economical and eloquent, and it unsettled the British, who, anxious to avoid raising expectations in Hong Kong, had regarded confidentiality as an essential element of the Peking talks. Their nerves were now on edge.

Thatcher's composure was further troubled by the beginnings of a cold, encouraged by a punishing schedule which had began with four days in Japan even before she arrived in China. Her energy was waning, but she insisted on carrying out relatively trivial engagements. On the Thursday, after her meeting with Zhao, she appeared barely able to remain awake through a late-afternoon concert of Beethoven by student musicians at the Peking Conservatory. She continued with a tour of the Central Academy of Fine Arts, an appearance at a British Council book display and a dinner for British businessmen at the Jianguo Hotel, before retiring for the night.

The next morning, Friday, 24 September, came the main meeting of Thatcher's stay: the session with Deng Xiaoping, China's senior leader. Though Deng did not condescend to hold any formal job corresponding to his overall power, he was at the zenith of his reign, and his sergeant-major's bark was the decisive voice on any issue of importance. Short-tempered, bossy, spitting and chain-smoking, Deng was no more inclined to self-doubt than Thatcher herself, and much less fond of argument. The stage was set for a two-hour meeting which was acknowledged, even in the coded language of British diplomacy, to have

been 'abrasive'.

AT THE Great Hall of the People that morning, Deng was flanked by Huang Hua, his foreign affairs minister, Zhang Wenjin, vice-minister, and Ke Hua, ambassador to London. Arrayed to Deng's right were Thatcher, Youde, Butler and Cradock; in the foreground, an enamel spittoon of which Deng made frequent use. 'There has been a lively debate going on for years,' reflected one diplomat, 'about whether Deng's habit of spitting into spittoons while receiving visitors is done for effect, or whether he really is a vulgar old bugger who cannot kick the habit.'

Deng was blunt. China, he said: '. . . cannot but resume the exercise of sovereignty over the whole of the Hong Kong area in 1997. Upon such resumption, the Chinese government will take into full consideration the territory's

special circumstances and adopt special policies in order to maintain the prosperity of Hong Kong.'

China, in other words, was determined to take back the whole of Hong Kong; and it felt no need of Britain's blessing to do so.

This, for Thatcher - and for Hong Kong - was a decisive moment. Deng had issued an ultimatum, which must be rejected or accepted. Thatcher could reject the ultimatum by replying that, legally, Britain held the high ground. It possessed a sovereignty over Hong Kong which it could choose to yield, or not, depending on what other arrangements might be reached with China.

Alternatively, she could choose the way of conciliation. She could acknowledge here and now that China's claim to sovereignty could not be resisted, and hope by doing so to create an atmosphere of co-operation in which China might reasonably be expected to offer concessions on administration much more readily than it would through adversarial negotiation.

Conciliation would have been the more apparently logical course, since both sides knew perfectly well that Britain could not remain in the ceded areas of Hong Kong after 1997 without China's co-operation. In practical terms, the treaties were worthless, sovereignty would be China's in due course, and any row about it would certainly damage Hong Kong in the short term whatever the eventual outcome.

But there were, for Thatcher, other and more acute considerations. However sound the reasoning, it would be politically intolerable for her to be seen to give in to the diktat of a Communist power. She defended the remnants and virtues of Empire more fiercely than any prime minister since Churchill: if a yielding of Hong Kong was inevitable, she must none the less be seen to fight against it.

There was an element of demagoguery here, but other considerations pulled in the same direction. If Thatcher's government was to 'sell' to Hong Kong - and to the British parliament - a 1997 deal which involved a transfer of sovereignty over Hong Kong to China, then Hong Kong and parliament would have to be persuaded that this was the best agreement that Britain could possibly have secured. It would be essential to make Chinese intransigence a matter of public record. Better, for these reasons, to start a fight and - if necessary - to lose it, than pre-emptively to surrender sovereignty and leave Hong Kong a hostage to China's generosity.

Thatcher stood her ground. Hong Kong, she duly told Deng, was British by virtue of three treaties which were valid in international law, two of which were cessions. These were substantial obligations. China could not simply disregard them. If it wanted to resume the whole of Hong Kong, the only way in which it could legally do so would be through varying the terms of the existing treaties, by agreement with Britain.

Thatcher understood the 'importance' of the 'sovereignty issue' to China, she told Deng. But Britain's primary concern was that an administration should remain in place in Hong Kong after 1997, capable of maintaining the 'stability and prosperity' of the territory. She was dismissive of the Chinese scheme to resume sovereignty over Hong Kong and then allow it to function as a capitalist enclave under Chinese rule: it was imaginative, but it was untested, unproven.

Only continued British administration - British 'rule', she said - could guarantee Hong Kong's well-being beyond 1997.

It was only then did Thatcher hint at her proposed bargain. If, she said, a 'satisfactory' agreement could be reached on administration, the nature of which she had already made clear, then she would 'consider making recommendations tothe British parliament' on the issue of sovereignty over Hong Kong. But agreement on administration must come first. For the time being, she concluded, the two countries should pursue discussions at a diplomatic level.

This, visibly, was not what Deng had expected, as he shuffled irritably in his chair. Not since the normalisation of Sino-British relations in 1972 had any British minister directly rejected China's claim to Hong Kong. Yet now, a decade later, a British prime minister was turning back the clock, and speaking - as China heard it - the language of 19th-century imperialism, defending the spoils of the Opium Wars and thrusting back into China's face its past weakness and shame. Deng's assertiveness gave way to outright anger. His immediate muttered comments were lost to the British record, but appeared to include the remark that Thatcher should be 'bombarded' out of her obstinacy.

Deng returned to the offensive by repeating his rejection of continued British rule in more categorical terms. If he agreed to let Britain stay in Hong Kong beyond 1997, he said, he would be no better than the traitors of the Qing dynasty who had first yielded Chinese soil to Britain under treaties which were illegal and invalid. He could not do it. China must resume sovereignty over Hong Kong, and sovereignty must include administration. The British flag would have to go. The British governor would have to go. And it would be China alone which decided what policies were 'suitable' for Hong Kong in the future. None the less, he said, China hoped that Britain would 'co-operate' in the transition, and it was prepared to enter into 'discussions' to that end. But it would not be bound by their results. If they failed to produce an agreement acceptable to China within two years, then China would announce its own policies for Hong Kong unilaterally. The meeting was over.

THE BRITISH had not foreseen that the Chinese might choose to fix a deadline to negotiations; and Deng's pre-emptive rejection of both sovereignty and continued British administration had been delivered in terms stronger than expected. But an agreement to negotiate had been reached, and the disaster of a deadlock had been averted. As the principals adjourned for lunch, it was left to Cradock, the British ambassador, and Zhang, the Chinese vice-foreign minister, to set about drafting a communique. Their brief statement showed only slight traces of the cracks over which it had been papered.

It said: 'The leaders of the two countries held far-reaching talks in a friendly atmosphere on the future of Hong Kong. Both leaders made clear their respective positions on the subject. They agreed to enter talks through diplomatic channels following the visit with the common aim of maintaining the stability and prosperity of Hong Kong.'

The communique pleased the British by virtue of its omissions. Though both Deng and Zhao had treated China's sovereignty over Hong Kong as a premise of any further discussion, the communique spoke only of 'respective positions' on the 'future' of Hong Kong. And, since the communique summarised for the record the basis on which the negotiations were to begin, the British could now assert that both sides were approaching the negotiating table without any formal preconditions having been acknowledged - and, in particular, with the British claim to sovereignty over Hong Kong intact, if not unchallenged.

A similar thought struck the Chinese, but somewhat later. At three o'clock that afternoon, when the text of the communique came chattering off the wires of the official New China News Agency, it proved to have gained a coda added unilaterally by China. This said: 'The Chinese government's position on the recovery of the whole region of Hong Kong is unequivocal and known to all.'

The communique appeared while Thatcher was giving her own main press conference of the Peking visit. When a journalist asked her to comment on China's commitment to 'recovery of the whole region of Hong Kong', she was provoked into repeating publicly the position which had so shocked Deng. 'There are three treaties in existence,' she said. 'We stick by our treaties unless we decide on something else. At the moment, we stick by our treaties.'

This was dangerous ground on which to break cover. But the more Thatcher reflected on the cavalier way in which the Chinese leaders were dismissing Britain's rights under international law, the more irritated she became. Enough was enough.

THATCHER'S COLD was wearing her down. Her voice, husky at the start of the press conference, was a croak by the end. Worse, she had lost her footing on the steps leading from the Great Hall of the People down into Tiananmen Square at lunchtime, and had tumbled to her knees before the waiting television cameras. The image which dominated the news in Hong Kong that evening was rich in portent: a British prime minister, in Peking to negotiate the territory's future, kowtowing towards the mausoleum of Chairman Mao Tse-tung at the centre of Tiananmen Square.

When Thatcher hosted her farewell banquet at the Great Hall of the People a few hours later, Zhao was again the only senior leader to attend. The British would undoubtedly have been more sensitive to the snub they were receiving, had they been aware that Deng and all the other Communist grandees had chosen to pass up Thatcher's banquet in favour of another one taking place the same night in the same building, hosted by Kim Il-sung.

While Zhao was left to exchange politely pointed speeches with Thatcher about their 'valuable and stimulating' talks, Kim was down the corridor, toasting 'militant friendship' and 'the raging flames of war against common enemies' late into the evening to an applauding audience led by Deng Xiaoping and a roll-call of the Politburo.

The Thatcher banquet ended sober and early, the Prime Minister appearing not merely tired but also just a shade chastened. She now appreciated, perhaps for the first time, just how difficult and time-consuming the Hong Kong question would prove. She took her leave of Peking that night with just a hint of conciliation, saying to Zhao: 'Our conversations have enabled me to attain a clearer insight into China's affairs, and a close personal understanding of the Chinese government's point of view. This complies with an old Chinese saying, which goes: 'Seeing for one's self is a hundred times better than hearing from others'.'

Robert Cottrell's book on the Hong Kong settlement will be published next June by John Murray.

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