The Hong Kong transfer treaty

On September 19th, 1984, the UK and China agreed the English and Chinese texts of what came to be known as the Sino-British Joint Declaration. It set out the details of Hong Kong’s status when sovereignty was transferred on 1st July 1997. The Chinese had argued that Hong Kong should simply revert to being Chinese territory when the UK’s lease expired, since the historical treaties that underpinned that lease were acquired under duress. They ruled out any prospect of a continuation of British administration, but in discussions the idea emerged of Hong Kong being a Special Administration Region of the People’s Republic of China, a region with a high degree of self-government, and with the preservation of its lifestyle.

In particular, the document set out that Hong Kong should enjoy a high degree of autonomy, “except for foreign and defence affairs.”

“It shall be allowed to have executive, legislative and independent judicial power, including that of final adjudication. The Basic Law explains that in addition to Chinese, English may also be used in organs of government and that apart from the national flag and national emblem of the PRC the HKSAR may use a regional flag and emblem of its own. It shall maintain the capitalist economic and trade systems previously practised in Hong Kong.”

The UK’s Prime Minister, Margaret Thatcher, was criticized for reaching an agreement with a Communist government headed by its Paramount Leader Deng Xiaoping, but the truth was that she had limited options. The UK government declared that "the alternative to acceptance of the present agreement is to have no agreement," which to modern ears sounds like “this flawed deal is better than no deal.”

The UK was in no position to resist militarily, and sought to obtain the best deal it could for its Hong Kong subjects. The Chinese, aware that the world was watching, was ready to agree a formula that might one day entice Taiwan to agree to a similar accommodation. Thus the idea of “one nation, two systems” took shape in the Joint Declaration.

Hong Kong, under the benign leadership of its Treasurer, Sir John Cowperthwaite, had gone from being a subsistence economy on a small land lacking resources into becoming a world-class economy with an enviable standard of living, greater than the UK itself enjoyed. It was living evidence that low tax, relatively unfettered, capitalism could generate wealth for a people on a scale previously undreamed of. Its economy was a vital part of China’s own economic progress when it abandoned socialism and allowed capitalism to flourish, so China had every reason to preserve Hong Kong’s economic success.

To strengthen the UK’s hand in the subsequent negotiations, the Adam Smith Institute published in 1989 “A Home for Enterprise,” calling for Hong Kong citizens to be offered the right to settle in the UK if they chose. We rather cheekily suggested that a Scottish island should be made available for them to repeat the success they had made years previously in Hong Kong. The aim was to let the Chinese know that the Hong Kong people had another option if they found Chinese conditions unacceptable

The heavy-handed Chinese attempt to allow extradition to mainland China for trial clearly rides roughshod over the treaty they agreed to, since “independent judicial power, including that of final adjudication” is part of a deal they signed. As the document sets out, "The whole makes up a formal international agreement, legally binding in all its parts. An international agreement of this kind is the highest form of commitment between two sovereign states."

The Hong Kong people naturally protested this flagrant violation of the international treaty, but once again, there is little any outsiders can do other than exert moral pressure. The ASI has renewed its call for British passport holders in Hong Kong to be given the full rights of British citizens, including the right to settle here. If this were to be done, the People’s Republic would denounce it as post-colonialist interference, but it might well make them tread more carefully.