September 24, 1982

Our basic position on the question of Hong Kong is clear. There are three major issues involved. One is sovereignty. Another is the way in which China will administer Hong Kong so as to maintain its prosperity after 1997. And still another is the need for the Chinese and British governments to hold appropriate discussions on ways to avoid major disturbances in Hong Kong during the 15 years between now and 1997.

On the question of sovereignty, China has no room for manoeuvre. To be frank, the question is not open to discussion. The time is ripe for making it unequivocally clear that China will recover Hong Kong in 1997. That is to say, China will recover not only the New Territories but also Hong Kong Island and Kowloon. It must be on that understanding that China and the United Kingdom hold talks on the ways and means of settling the Hong Kong question.

If China failed to recover Hong Kong in 1997, when the People's Republic will have been established for 48 years, no Chinese leaders or government would be able to justify themselves for that failure before the Chinese people or before the people of the world. It would mean that the present Chinese government was just like the government of the late Qing Dynasty and that the present Chinese leaders were just like Li Hongzhang!

We have waited for 33 years, and if we add another 15 years, that will make 48. We are able to wait for such a long time because we enjoy the full confidence of the people. But if we failed to recover Hong Kong in 15 years, the people would no longer have reason to trust us, and any Chinese government would have no alternative but to step down and voluntarily leave the political stage. Therefore, at this time -- I don't mean today, of course, but in no more than one or two years -- China will officially announce its decision to recover Hong Kong. We can wait another year or two, but definitely not longer.

In a broad sense, China's announcement of this policy decision will be beneficial to Britain too, because it will mean that 1997 will mark the end of the era of British colonial rule, and that will be welcomed by world public opinion. So the British government should support this policy decision. The Chinese and British governments should work together to handle the question of Hong Kong in a satisfactory manner.

We hope to have Britain's cooperation in maintaining prosperity in Hong Kong, but this does not mean that continued prosperity can only be ensured under British administration. It depends fundamentally on applying policies suitable to Hong Kong, under Chinese administration after the recovery. Hong Kong's current political and economic systems and even most of its laws can remain in force. Of course, some of them will be modified. Hong Kong will continue under capitalism, and many systems currently in use that are suitable will be maintained. Before formulating the principles and policies for the next 15 years and beyond, we shall have an extensive exchange of views with Hong Kong people from all walks of life. These principles and policies should be acceptable not only to the people of Hong Kong but also to foreign investors, and first of all to Britain, because they will benefit them too. We hope that the Chinese and British governments will engage in friendly consultations on this question, and we shall be glad to listen to suggestions put forward by the British government. All this will take time. Why must we wait one or two years before announcing our decision to recover Hong Kong? Because during that period we hope to consult with all sorts of people.

The main concern of people today is that if prosperity is not maintained in Hong Kong, it might retard China's drive for modernization. In my opinion, while we cannot say it would have no effect whatever on China's modernization, it would be a mistake to say the effect would be very great. If China had decided to base the success of its modernization drive on prosperity in Hong Kong, that policy decision would have been wrong. People are also concerned about the possible withdrawal of foreign capital from Hong Kong. But so long as our policies are appropriate, capital that leaves Hong Kong will return. Therefore, when we announce our decision to recover Hong Kong in 1997, we should at the same time announce the systems and policies that will be applied there after that date.

As to the assertion that once China declares its decision to recover Hong Kong in 1997 there will be disturbances there, I believe that while minor disturbances are inevitable, major ones can be avoided if China and Britain approach the question in a cooperative spirit. I also want to tell Madam that when the Chinese government made this policy decision, it took all eventualities into account. We even considered the possibility of something we would hate to see happen -- that is, we considered what we should do if serious disturbances occurred in Hong Kong during the 15-year transition period. The Chinese government would then be compelled to reconsider the timing and manner of the recovery. If the announcement of the recovery of Hong Kong has, as Madam put it, ``a disastrous effect'', we shall face that disaster squarely and make a new policy decision. I hope that beginning from Madam's current visit, government officials of the two countries will conduct earnest consultations through diplomatic channels to find ways of avoiding any disasters.

I am convinced that we can work out policies that should be applied after the recovery of Hong Kong and that will be acceptable to all quarters. I have no concern on that score. What I am concerned about is how to make a smooth transition over the next 15 years. I am concerned that there may be major disturbances in this period, man-made disturbances. These could be created not just by foreigners but also by Chinese -- but chiefly by Britons. It is very easy to create disturbances. This is precisely the problem our consultations will be designed to solve. The governments of the two countries should not only refrain from doing anything that would impair the prosperity of Hong Kong, but they should also ensure that entrepreneurs and people in all other lines of work refrain as well. There must be no major disturbances in Hong Kong during the 15-year transition period, and affairs there must be administered even better after the Chinese recovery in 1997.

We suggest that an agreement be reached that the two sides will begin consultations on the question of Hong Kong through diplomatic channels. The prerequisite is the understanding that China will recover Hong Kong in 1997. On this basis we should discuss how to carry out the transition successfully in the next 15 years and what to do in Hong Kong after the end of that period.

(A talk with British Prime Minister Margaret Thatcher.)

question of Hong Kong: This is a question left over from the past. The region of Hong Kong (comprising Hong Kong Island, Kowloon and the New Territories) has been part of China's territory since ancient times. In 1840 Britain launched the Opium War against China, and in 1842 it forced the Qing government to sign the Treaty of Nanjing, according to which Hong Kong Island was permanently ceded to Britain. In 1856 the Anglo-French forces launched the second Opium War, and in 1860 Britain forced the Qing government to conclude the Convention of Beijing, under which the tip of the Kowloon Peninsula was likewise permanently ceded to Britain. Taking advantage of moves by other powers to stake out spheres of influence in China, in 1898 Britain once again forced the Qing government to sign a treaty, the Convention for the Extension of Hong Kong. Under this convention Britain was granted a 99-year lease on a large stretch of land on the Kowloon Peninsula and more than 200 surrounding islets (referred to as the "New Territories"), a lease that is due to expire on June 30, 1997. The Chinese people have always been opposed to the three unequal treaties.

Since the founding of the People's Republic of China, the consistent position of the Chinese government has been that Hong Kong is part of China's territory. It does not recognize the three unequal treaties imposed on China by the imperialist power and has always held that the question of Hong Kong should be settled through negotiation when conditions were ripe and that until that time the status quo should be maintained.

After the Third Plenary Session of the Eleventh CPC Central Committee, held in December 1978, the Chinese people began to work on the three major tasks of realizing socialist modernization, achieving the reunification of the motherland, and opposing hegemonism and safeguarding world peace. Deng Xiaoping proposed that the Taiwan and Hong Kong questions be resolved in accordance with the concept of "one country, two systems". Meanwhile, as the year 1997 drew nearer, Britain kept exploring China's position on the Hong Kong question. Under these circumstances, the conditions for settling the question were ripe.

The talks held by the Chinese and British governments for this purpose were divided into two stages. In the first stage, between September 1982, when British Prime Minister Margaret Thatcher visited China, and June 1983, the talks centred on overall principles and procedures. In the second stage, between July 1983 and September 1984, delegations of the two governments held 22 rounds of talks on specific substantive issues.

On September 24, 1982, Deng Xiaoping met with Mrs. Thatcher. The Chinese Premier had already talked with her earlier. On that occasion the Premier had officially notified Britain that the Chinese government had decided to recover the entire Hong Kong area in 1997. At the same time, he had explained that after that China would apply special policies towards Hong Kong. For example, a Hong Kong Special Administrative Region would be established, Hong Kong would be administered by its local Chinese people and its current social and economic systems and way of life would remain unchanged. However, Mrs. Thatcher had insisted that the three unequal treaties should still hold good, saying that if China agreed to Britain's continued administration of Hong Kong after 1997, Britain would take China's claim to sovereignty over the territory into consideration.

It was in response to these remarks that Deng Xiaoping had an important talk with Mrs. Thatcher. Thanks to this talk, the two sides agreed to hold negotiations on the settlement of the Hong Kong question through diplomatic channels. During the next six months, because the British side stuck to its position on the question of sovereignty over Hong Kong, there was no progress in the negotiations. However, in March 1983 Mrs. Thatcher wrote to the Chinese Premier promising that at a certain stage she would propose to the British Parliament that sovereignty over all of Hong Kong be returned to China. She also expressed the hope that the two sides would hold substantive talks at the earliest possible date. In April the Chinese Premier wrote her back, saying that the Chinese government agreed to hold formal talks as soon as possible.

On July 12 and 13, 1983, delegations of the Chinese and British governments held their first round of talks. Because the British delegation still insisted that Britain should continue to administer Hong Kong after 1997, no progress whatever was made in the first four rounds of talks. In September 1983, when Deng Xiaoping met with the visiting former Prime Minister Edward Heath, he said that it was impossible for Britain to exchange sovereignty for the right of administration. He advised the British side to change its attitude, so that China would not have to announce unilaterally the principles and policies for resolving the Hong Kong question. In October 1983 the British Prime Minister wrote to the Chinese government, saying that the two sides could negotiate arrangements of lasting value for Hong Kong on the basis of China's proposals. In the fifth and sixth rounds of talks, the British negotiators confirmed that they would no longer insist on British administration of Hong Kong or seek condominium in any form. They said they understood that China's plan was based on the premise that both sovereignty over all of Hong Kong and the right to administer it would be returned to China in 1997. Thus, the main obstacles in the Sino-British talks began to be cleared away.

Starting with the seventh round of talks in December 1983, negotiations were conducted on the basis of the Chinese government's fundamental principles and policies for resolving the Hong Kong question. According to these, the future Hong Kong Special Administrative Region would be directly under the authority of the Central People's Government of the People's Republic. Except in foreign affairs and matters of defence, which would be the responsibilities of the Central Government, the region would enjoy a high degree of autonomy. The Central Government would station troops in the region for its defence. The government of the region would be composed of local inhabitants, and British and other foreign nationals might serve as advisers or hold posts up to the level of deputy secretary in some government departments.

During the discussions, although the British had explicitly undertaken not to put forward any suggestions that would contravene China's position on sovereignty, they kept raising proposals that did exactly that. For example, by trying time and again to replace "a high degree of autonomy", the language proposed by the Chinese, with "maximum autonomy", the British sought to prevent Hong Kong's being placed directly under the authority of the Central Government. They demanded repeatedly that the Chinese undertake not to station troops in Hong Kong, thus trying to restrict China in its exercise of sovereignty. In an attempt to make the future Special Administrative Region a member or quasi-member of the British Commonwealth, they also insisted that Britain should be represented in Hong Kong not by a consul-general, as other countries were, but by "a British commissioner". In addition, they proposed that expatriate officials holding Hong Kong identification cards be eligible for appointment to "posts up to the highest level of the civil service" and demanded that the Chinese agree to accept intact after 1997 the existing structure of the Hong Kong government, including any changes the British might make in it during the period of transition. And so on. These proposals from the British side were, in essence, designed to turn Hong Kong into an independent or semi-independent political entity subject to Britain's influence, and they were diametrically opposed to China's stand on sovereignty. Naturally, the Chinese side resolutely rejected them.

Beginning from the 12th round of talks in April 1984, the two sides discussed the arrangements for Hong Kong during the period of transition and matters relating to the transfer of government.

One of the most difficult problems encountered during the negotiations was the question of establishing a joint Sino-British body in Hong Kong. The Chinese side suggested arrangements for the transition period and set forth its basic ideas about the transfer of government, proposing that a permanent joint group be established in Hong Kong. The tasks of the group would be to coordinate the implementation of the Sino-British agreement and to discuss specific measures for realizing the smooth transfer of government. This proposal met with strong opposition from the British side, which held that the period until 1997 should not be officially designated as the "transition period" and that no permanent bodies whatever should be established, so as not to create the impression of Sino-British condominium.

In April 1984 British Foreign Secretary Sir Geoffrey Howe visited China. When meeting with him, Deng Xiaoping said that as there was much to be done during the transition period, it was essential to set up a joint body. He added that it could be based in Hong Kong but meet by turns in Hong Kong, Beijing and London. The Foreign Secretary agreed that the two sides could hold discussions on the basis of these remarks. But in the next three or four months, the British still opposed the establishment of a joint group in Hong Kong, bringing the talks to a deadlock. When the Foreign Secretary visited China again in July of the same year, the Chinese stated that if the British agreed to establish a joint group and make Hong Kong its principal base, the date when it should take Hong Kong as its principal base and the question of prolonging its existence for a period of time after 1997 would be open to discussion. Finally, the two sides agreed to establish a joint liaison group which would make Hong Kong its principal base starting on July 1, 1988, and be abolished on January 1, 2000.

Through negotiations, China and Britain decided that in their agreement it should be explicitly stated that China would recover Hong Kong and resume the exercise of sovereignty over it. As the British side did not accept the Chinese side's wording "resume the exercise of sovereignty", it put forward several alternatives on different occasions. However, because all these formulations implied that the three unequal treaties still held good, they were rejected by the Chinese. Finally, the two sides agreed that the form of a "joint declaration" should be used and that it would be worded as follows: "The Government of the People's Republic of China ... has decided to resume the exercise of sovereignty over Hong Kong with effect from 1 July 1997. The Government of the United Kingdom declares that it will restore Hong Kong to the People's Republic of China with effect from 1 July 1997." In this way the question of wording with regard to sovereignty was resolved.

After that, the British and Chinese delegations held three more rounds of talks dealing with specific, complex policy and technical questions, such as nationality, civil aviation and land. They repeatedly discussed the wording of the future agreement. By September 18, 1984, the two sides had agreed on all questions, and on September 26 they initialed the "Sino-British Joint Declaration" and its three annexes. Thus, after two years the negotiations on the question of Hong Kong came to a successful conclusion. On December 19, 1984, in Beijing, the heads of the Chinese and British governments officially signed the document. On May 27, 1985, the two governments exchanged instruments of ratification in Beijing, and the Joint Declaration officially entered into force.

not only the New Territories but also Hong Kong Island and Kowloon: The region of Hong Kong comprises Hong Kong Island, Kowloon and the New Territories, covering a total area of 1,076 square kilometres, divided as follows: Hong Kong Island 79.77 square kilometres, Kowloon 11.7 and the New Territories 984.53. At the end of 1992 the region had a total population of 5.9 million. Before British occupation it was under the jurisdiction of Xin'an County (later renamed Bao'an County and now the city of Shenzhen), Guangdong Province, China.

Li Hongzhang: Li Hongzhang (1823-1901), a native of Hefei, Anhui Province, was an important military and administrative official during the late Qing Dynasty. In 1870 he became Governor of Zhili (present-day Hebei) Province and Minister in Charge of the Northern Coastal Provinces. On behalf of the Qing government he presided over the signing of unequal treaties such as the Sino-British Yantai Treaty, the Sino-French New Treaty, the Sino-Japanese Treaty of Shinomoseki, the Sino-Russian Secret Pact, and the Peace Treaty of 1901 with 11 countries including Great Britain, the United States, Russia, Germany and Japan. Under the terms of these treaties China relinquished sovereignty, ceded territory and paid indemnities.