The History of Hong Kong (Part 10)

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The views expressed should not be used for medical diagnosis or treatment as a substitute for professional medical advice. Individual circumstances may vary for prescription only. Safety info found at freestylelibrary.us. Hey everyone, this is Los La Montgomery coming to you as usual from the China History Podcast. Got a lot to cover today, so let's just get right into it. By hook or by crook, I'm going to finish off this history of Hong Kong series in this episode. The events that went down in 1966 and 1967 with the star fairy and leftist riots were all the government needed to know that something had to be done. This matter of how big of a social safety net should be provided always challenged leaders from ancient times and into today. Well, 1966, 1967, Hong Kong finally was reaching that tipping point. The go-go 1960s had raised Hong Kong's economy to the next level and the way things were looking, they were locked and loaded and ready to reach new heights of achievement and prosperity in the 70s. The working poor were willing to keep their traps shut in the 50s because they all knew in those tough times everyone had to sacrifice. But not now, everyone could see the good times were rolling. How come they weren't getting a piece of the action? The 66 and 67 riots showed the government that with all this new found and harder and prosperity, they had to be a little less stingy with those who couldn't get in line at the buffet table. Governor David Trench tried to be the one to carry out these reforms in the mid 60s. But as we mentioned, last time he got all swept up in the chaos that hit Hong Kong hard during the 67 riots in the aftermath. To some extent, he was able to prime the pump a little for his successor, Sir Murray McElhose, Lord McElhose. He was the 25th governor. There are only three more who will follow him. He served 10 years and six months, making him Hong Kong's longest serving governor, beating out the 22nd governor, Sir Alexander Grantham, by one month. The McElhose era of the 70s and up to 1982 truly was a turning point in the history of Hong Kong. When looking back on the signature achievements made during the governorship of Murray McElhose from November of 1971 to May of 1982, I guess the main ones were the establishment of the ICAC, 9-year-free compulsory education, the fire-reaching government housing programs, the establishment of the new towns of Shatin, Tonmoon, and Tai Po, and others that followed. All he did for the establishment of country parks where Hong Kong people could escape the urban sprawl, the MTR, the Cross-Harvard Tunnel, all happened during his watch. The MTR opening in October 79 and the Cross-Harvard Tunnel in August of 72. And the whole matter of 1997, that since the turn of the century in 1900 seemed so far, far away, was now coming in fast from the distance. This elephant in the room had gotten so big. Book China and Britain bided their time and waited for the other to broach the subject. Though many advised against it, it was Murray McElhose who would be the one to raise the issue of the lease. First, and that, in turn, led to the whole concatenation of events that led to the signing of the Joint Declaration in 1984, basic law in 1990, and the handover on June 30, 1997. So, before I get too far ahead of myself, let's go back to the day Murray McElhose came to town. The early 70s to set the stage had a lot going on, especially with respect to China. 71 and 72 saw the whole drama with ping pong diplomacy, secret meetings between Kissinger and Premier Joe, Nixon's visit in February of 1972 during the week that changed the world. Vietnam, the Cold War, the cultural revolution winding down, the old guard of China revolutionaries were passing away one by one, and the US was abandoning their stalwart friend in Taiwan. When Lord McElhose sat himself down behind the governor's desk for the first time, history was being made all around him. In the earliest moments, when the PRC stepped onto the world stage in 1972, Huanghua said, at the UN, the question of Hong Kong and Macau belonged to the category of questions resulting from the series of unequal treaties, which the imperialists imposed on China. Hong Kong and Macau are part of Chinese territory, occupied by the British and Portuguese authorities. The settlement of the question of Hong Kong and Macau is entirely within China's sovereign right and does not at all fall under the category of colonial territories, covered by the declaration on the granting of independence to the colonial countries and people. The Chinese government has consistently held that they should be settled in an appropriate way when conditions are ripe. Prime Minister Heath and Foreign Secretary Sir Alec Douglas-Home took no action against what Huanghua said, and to not say anything to counter such a declaration, in Diplos speak, is tantamount to say, "Hey, man, I hear you." So right there, back in 1972, there was no secret where China stood on the issue, and you could forget about any chance of renewing that lease on the new territories for another 99 years. Britain cozyed up more with China, announcing that embassies were going to be set up in London and Beijing. This didn't happen overnight, and was the culmination of two decades of discussions, but the timing was excellent. The usual boilerplate material was placed in the formal document that maintained that both sides agreed to the principles of mutual respect for sovereignty and territorial integrity. This carried a particular amount of weight in this case because of the Hong Kong issue. So this is when some serious consideration began to be given to the whole 1997 issue. Up to now, no one had said anything about it, and if neither side raised the issue, then officially the issue didn't exist. So as far as Hong Kong and the matter of the lease on the new territories coming due in 1997, out of sight, out of mind, but not really. It was very high on the minds of both sides. After the 1967 riots, the British knew with a degree of certainty there was no way in the world they could defend Hong Kong against China. This didn't mean they were ready to throw in the towel, but history was now on China's side. China could come in any time, any day, and just smash and grab the whole territory. Not a thing Britain can do. In fact, all China had to do was turn off the water supply, and that would be all she wrote. So trying to defy China militarily and hide behind the opium war and post-opium war treaties and try to win in the World Court of Public Opinion was not going to be a good strategy. There were a lot more things at stake for Britain than simply the future of Hong Kong as a British possession. As China was slowly getting up off its knees from the after-effects of the cultural revolution, there was talk going around that the future potential of China as a world commercial and trading powerhouse that, you know, although not now, might one day offer all kinds of opportunities for British companies. So although 1997 hadn't been on the table yet, both sides had to privately start preparing for it. One important little bit of business that had to be addressed was right of a boat in Britain, yet about 3.3 million Hong Kong Chinese. And the thought of all of them picking up and moving unmasked to England was a frightening thought to many. The immigration ordinance 1971 took care of that, that little bit of legislation closed the door for right of a boat in Britain to anyone except those with a direct personal or ancestral connection with Britain. So not unless you had some sort of link to Britain by birth, adoption, naturalization, or where children or grandchildren of such persons, you'd better make other plans. Some say this was the first move made that led Hong Kong people to believe in the earliest days that Great Britain didn't have any plans for Hong Kong beyond 1997. This sort of served as the initial warning bell that China was taking over. Right around the time of the immigration ordinance of in 1971, Murray McElhoes came to town. This was in November 1971. On the 23rd of that month, the PRC slid into the seat previously occupied by the Republic of China government at the United Nations. Nixon's visit was only a few months away. From here on out, what Beijing was thinking was gonna be central to whatever discussions went on between China and the UK. For this reason, the next three governors, beginning with Murray McElhoes, were all bona fide synologists who had worked their way up through the foreign service. These were McElhoes, Edward Yode, and David Wilson. These three all knew how the game was played with China and weren't so beholden to politics and how decisions made out in the far east were received back home. McElhoes came in and began changing the tone immediately. This guy was different from the previous 24 governors going back to Pottenger. He earned his stripes right out of the starting gate as far as being viewed as a man of the people. He didn't go in for all the trappings of the office and besides dressing like a normal guy, would often choose to walk to meetings rather than take a car with a whole entourage. In the 1971 Hong Kong annual review, which is sort of a state of the union address, the priority areas called out for reform and expansion were in water and power, education, health, and housing. Housing was the biggest crisis at the moment. Always had been. Too many people and not enough dwellings to fit them in. Even after the Shekkit May fire in 1953, there were still thousands and thousands of squatters. Those who were able to get off the mountainside and into some sort of government subsidized housing ended up in these 120 square foot concrete boxes where five adults were expected to live. No bathroom facilities. You had to use the equivalent of a necessary. But you know, a lot of times if you just throw enough money at a problem, it starts to fix itself. And that's what happened here. Between 1970 and '72, government expenditures increased over 50%. Part of the plan to ameliorate the housing problem was to build the satellite towns out in the new territories. Typo and Chateen were picked as two centers of gravity where these towns would be built around. Further to the north of the new territory, saw massive expansion of housing in Changshui and Fanling. In the western part of the territory, Chunwan and Tanmoon also saw a lot of high rises going up. Within 25 years, more than two and a half million people moved into this housing. It's still going up as we speak, and there's still a shortage. But not anything like the '60s, and before the housing reforms initiated by Governor Mackelhoes began. The MTR was set up in 1975. The Disha Tialu Gongsu, this company, was created to deal with the issue of mass transit. So this mass transit railway corporation, MTRC, which today is one of the most profitable and admired public transport systems in the world, it started off small, running only between Shaqip May and Guantong in East Kaolun. But it brought immediate relief to a lot of people. And into the 1980s and '90s, there has been non-stop expansion. Not all went according to plan. There was a stock market crash in March of '73 that put a damper on things. But the territory was able to bounce back from that. August 1971 saw typhoon rose. This was the worst one to hit since typhoon Wanda in 1962. Yet 175 mile per hour winds and 6.3 inches of rain. 5,000 were left homeless. One of the Hong Kong Macau Ferry sunk, bringing 88 people down to Davey Jones Locker. All in all, 110 people lost their lives. In August 1979 came typhoon hope. 100 people lost their lives in that storm. Of course, this kind of weather was all normal stuff going on for a century and a half since the colony was founded. In 1974, Chinese became the official language together with English. It's hard to believe with over 98% of the populace speaking Cantonese. Everything in the government was in English. In 1974, it was declared that, quote, both languages possess equal status and enjoy equality of use for the purposes of communication between the government and members of the public. Now, this all made it official, but in practical terms, it took a long time to get this implemented. And only by 1989, when I moved out there, laws began to be issued in both languages for the first time. Another of Murray-Mackelhose's signature achievements during his time in the governor's mansion was the establishment of the ICAC, the independent commission against corruption. Known today as the liyen cheng gong shu. Corruption was pretty bad coming out of the 1960s. Anything could be heard for a price. The triads were paying every cop off and the man on the street found he couldn't work the government system without the constant need to pay chao chien or tea money to some bureaucrat. It was pretty bad and no one was doing anything about it, mainly because so many profited from the system. It was so entrenched in Hong Kong society. No one could ever get anything done without putting up with this systemic extortion. Sometimes, it merely takes an incident of some sort and then the whole rotten system just collapses on itself. There was this bruhaha that went down called the Godbird scandal. Peter Godbird was a policeman's policeman decorated for his bravery during the '67 riots. This guy was chief superintendent and second in command in Kaolun. He was big and he was powerful. And during the course of his work in the Royal Hong Kong police, he managed to salt away hundreds and hundreds of thousands of dollars in overseas accounts. April 1973, the month the World Trade Center in New York City opened. Word leaked out about Mr. Godbird. He got wise to the authorities that they were on to him. So he uses his connections and security clarences to fly the coop. He escapes and the government is massively embarrassed by this scandal. This boulder unleashed an avalanche of public outrage. So the government was forced into action because of the uproar. Governor Mackelhoes called for an inquiry, which finds, indeed, there be some intense corruption on a systemic scale just as everyone thought. And this, my friends, leads to the creation of none other than the ICAC, the independent commission against corruption, the very capable Sir Jack Cater was put in charge as the founding commissioner. He had made his way up the ranks in Hong Kong since 1946, and was a very respected figure. He left his mark in Hong Kong history thanks in part to his early stewardship of the ICAC. As you can imagine, plenty of people weren't too keen on something like this and there were plenty of vested interests who required a lot of pressure and persuasion before they would bend to the will of this powerful and very independent commission. Hey, they cleaned the place up. While not perfect, Hong Kong is now one of the least corrupt places around. The ICAC is catching people all the time and I'm sure a lot of public servants and business people think twice before making a deal with the devil. Anyways, the ICAC report corruption hotline is and remains 2526-6366. Make that call if you have someone to report. Peter Godberg was later captured and tried in 1975. He served four years and so well did the ICAC do in rounding up all the bad apples. In the end, they had to offer a kind of an amnesty to those whose crimes weren't as egregious as the worst. But most of the big fish got caught and had to pay their debt to society in one form or another. The important point was that the place was cleaned up and most all of the weeds were removed. I'll tell you, it was things like this that we credit Murray Mackelhoes for. He ushered in and managed a nice decade of stability and growth. And for the first time in Hong Kong history, the folks on the lower strata of society got some relief from the government and some hope for the future in the form of education for their children and grandchildren. Believe me, plenty of moms, dads, grandpas, and grandmas ended up okay in the winter of their lives thanks to kids and grandkids who got a free basic education and went on to build a career and were able to support their families. It's hard to fathom how much education can contribute to society just needs to percolate for a decade or two before you see the obvious results. So the 1970s and into the '80s, saw reforms in the civil service and then almost all of the public services. Public housing was going up everywhere. This would soak up about 40% of the population one day. Transport was improving, the MTR was expanding always. Then to create some grassroots involvement with the government, district boards were established in the 18 districts of Hong Kong. There were local councils and served as consultative bodies. These worked well and are also credited to Governor McElhose. The people now had a direct link to the government and could voice whatever it was that was on their mind. So these years were something. And of course, you had Bruce Lee during this period of Hong Kong history, the big boss 1971, Fista Fury and Way of the Dragon. [BLANK_AUDIO] 1972, enter the dragon 1973, and the posthumously released game of death 1978. Bruce Lee, of course, passed away tragically a few months shy of his 33rd birthday in Kaolun Tong and July 20, 1973. He was also from this time. The 70s and 80s also saw another kind of transformation taking place in Hong Kong. This was the emergence of many new Chinese tycoons. These were different than the Robert Houtongs, the Tung Xu, Kins, Shows and Chows. Those early multi-millionaires were part of the British Hong Kong establishment, and in most cases, either worked for them or owed some degree of their prosperity or position in Hong Kong society to the British. These new guys did not. They were all men who fled China for one reason or another, Japanese invasion, war, famine. The two most famous were probably YK Powell and Lee Cushing, and as if to show that the age of British dominance was over, you also saw the emergence of the big mega-China companies in Hong Kong. These were China merchants, steam navigation, good old Zhao Xiang Zhu Ji-tuan, the Bank of China, China Resources and SIDIC, to name a few. These companies were immensely powerful and influential because of their links to the China government. The British firms like HSBC, Jardines, Hutchison Wampoa, Swire, Dairy Farm, Hong Kong land, these guys all had these intricate interlocking directorships and the directors were on each other's boards. This old boy network consisted of etonians and grads from Cambridge and Oxford and Hong Kong. They all hung out at the Hong Kong Club, the Yacht Club, and of course the Royal Hong Kong Jackie Club, theirs was a solid, impenetrable fortress. But sure enough, come 1980, that impenetrable fortress was indeed penetrated. Now, I know if you're not interested in business, this story might not mean anything to you, but I assure you when it was all going down, it was sending shock waves through the Hong Kong business community. There was this firm, Hutchison Wampoa. They'd been around since the 1860s, so I guess you could call them part of the Hong Kong corporate establishment elite to make a long story short. They started when on a spending binge in the 70s and I guess you could say they overdid it. They got themselves in a little bit of hot water and were heavily overextended. The company was left with no alternative but to call their good buddies at HSBC, Hong Kong Shanghai Bank, and asked them to bail them out of their situation. So HSBC went in and reorganized things, set the place straight, and took a 22% stake in the company. And then on September 25th, 1979, at the close of trading in London, Hong Kong bank announced they were selling their 22% stake in Hutchison to none other than Mr Lee Cushing's flagship company, Changgong, for the ultra bargain basement price of $639 million Hong Kong dollars. Today, Hutchison employs over a quarter million employees in 54 countries. Their businesses include ports, property hotels, retail, energy, and telecom. Very big $30 billion company, very profitable. Lee Cushing, who we featured in CHP Episode 13, ran from China in times of great chaos and came to Hong Kong. We're today. He's considered by all to be the territory's most celebrated success story. HSBC, you see, they were clearly placing their chips on rising Chinese tycoons like Lee Cushing. They were turning away from their old chums and the British establishment and cultivating a new and much more potentially profitable wave of newcomers. They saw what was happening in China and knew the time had come to start making friends with these rising stars. So when they put their chips on Lee Cushing, it was a very smart move. Lee Cushing went in and took over Hutchison, Wampoa, and brought in Mr Simon Murray, and the rest, I will encapsulate by saying, was history. Lee Cushing wasn't the only Hong Kong Chinese on the prowl for prized British assets. Also in 1979, YK POW, backed by HSBC, seized control of the Kaolun Warp and go down. And later on, 1985, YK POW took over another of the great pillars of Hong Kong corporate society. This was Wheelock in company. They'd been around since 1857, which qualifies them as a pillar. They're a heavy-duty mover and shaker in the property market, not only in Hong Kong, but in Singapore as well. And to the man on the street, we know them as the company behind Lane Crawford, City Super, Joyce, and the cable services they provided the territory. Hong Kong was no longer simply a trading and manufacturing center. It was now growing to be a world financial center as well. This is another change that began in the 1970s and into the 80s. In 1984, Jardine's, one of the founders of Hong Kong, if there ever was one, moved their domicile to Bermuda, which signaled the beginning of a disengagement from Hong Kong. Now in 1995, they will send a formal apology to China for this vote of no confidence in Hong Kong's future under China. At the time, Jardine's move out of the territory was considered a big slap in the face to China because for such a high profile company as Jardine's to bail, "Hey, man, it may China look bad." And they later on taught Jardine's upper management who was boss. So it was a completely different dynamic now in 1980s and 1990s Hong Kong. It was as if the place had shed its skin of being a British colony and had now become its own man. The place had grown a new identity and was unrecognizable to its former colonial self. The cultural revolution was finished and the Dung Era was in full swing. Special economic zones of Shenzhen and Zhuhai attracted thousands and thousands of Hong Kong investors like my former boss who set up their manufacturing across the border. The future wasn't looking so bad, but the nagging 1997 question. As each day passed and everyone got closer to that date, the parlor game of guessing what was going to happen got more and more intense. Every conceivable scenario was discussed, but the truth remained. Dung Xiaoping's deal team in this matter held all the cards and China played their hand well. There was a consensus that believed Britain should say nothing. After all, China wasn't bringing up the matter. There was this belief that the status quo might possibly be able to be maintained. And that, if the British side never raised the issue, the Chinese wouldn't say anything either. But Zhou and Li had made it clear back in 1971 that Hong Kong was coming back to China in 1997. In Edward Heath, yes, taxman Mr. Heath, he let it be known back in 1982 that Britain was well aware of the situation and wasn't going to make any waves. Dung had told him clearly nothing would change in Hong Kong. He said, quote, in our Chinese constitution, there was a provision that we can establish special administrative regions with rules separate from the rest of the country. Hey, enough said. But aside from all these unofficial pronouncements and loose talk, nothing had been discussed or worked out yet. And so the whole topic was still rife with speculation. One could say Britain hadn't done too shabby of a job managing Hong Kong, especially after the Mackelhoes reforms. There was quite a bit of consensus out there that believed that even after China resumed sovereignty, they might request Britain to stay and continue their stellar job of administering the territory. Towards the end of the 1970s and into the 80s, the subject of 1997 was getting more and more attention. It got to the point where property investors and they were very powerful. A lot of those guys started to make waves about obtaining financing on deals that straddle 1997. The banks were quite hesitant to offer any financing on anything that had life beyond 1997. After all, no discussions had been made with China on the subject. One might speculate that whatever contracts were signed before 1997 would still be valid after 1997, but no one knew for sure. It came to a point where too much business couldn't be transacted. I gotta remember, cultural revolution ended in 1976. And back then people still believe China was capable of anything. You just couldn't predict. And in the late 70s and early 80s, Deng Xiaoping's reforms were just getting started. And no one knew yet what we know now. So with all this uncertainty now affecting business as usual, the Hong Kong government and the foreign office felt they couldn't wait around it forever. Someone had to take the massive risk of speaking up first, which in the Chinese negotiation system sometimes implies weakness. A break came in early 1979 when the Ministry of Foreign Trade invited Governor McElhose to come to Beijing to discuss trade projects. This was something Britain was hot about is. Up till now, the two-way trade between Britain and China was anemic at best. This was an opportunity to advance the future prospects of of British trade with the new China. A company in Governor Michael Hose was none other than Percy Cratic. He was a long-serving diplomat and synologist. If you remember in August of 1967 when the Red Guards attacked the British Representative Office in Beijing, Percy Cratic was part of the gang up there who got all man-handled and roughed up. He served as a British ambassador to China from 78 to 83. He will play a major role from this point forward until 1997. So this visiting delegation, they had their meetings and got to have some time with The Great Man, Deng Xiaoping. March 24, 1979 is the initial meeting and Deng lets them know and man, these words were so important they couldn't have come from anyone else's lips. He said that whatever happens in the end, Hong Kong must be under Chinese sovereignty and that for a considerable time to follow into the 21st century, nothing would change in Hong Kong and capitalism can continue on there same as before. China would continue to carry out their economic system side by side. Okay, well now that that one was out of the way and the door was closed locked, keep put away for safekeeping, there still remain the hope that the British could continue on in Hong Kong and some administrative role, but rather than risk overstepping their bounds, they didn't broach the subject. They asked instead about the matter of how to handle loans, straddling 1997. For example, funding for the MTR and for the new airport was difficult without knowing what China's position was. Deng assured him no one had anything to worry about. So that went well. This cryptic message was taken back to Hong Kong was rather well received, especially by the business community. China was still being coy about the whole matter, but at least signals were being sent out that suggested business would be allowed to prosper without any kind of interference from China. Things began to heat up in 1982. Prime Minister Margaret Thatcher, fresh from victory in the Falklands, thought now is the time to take this whole matter of 1997 on. The people of Hong Kong waited with a high degree of trepidation. The British wanted to appear strong and didn't want to have anyone pointing fingers at them saying they sent the people of Hong Kong up the creek without a paddle. The people of Hong Kong had high expectations and there was major concern about how everyone might fear under China management compared to how the British maintained things. The spectrum of feelings among the populace went from extreme patriotic pride about the takeover to share an utter dread and talk of abandonment of Hong Kong and moving elsewhere. And then there was everything in between as well. You know, in one form or another, the countdown to June 30th 1997 had been going on since June 9th, 1898 when they inked the convention between Great Britain and China, respecting an extension of Hong Kong territory, aka the Second Convention of Peaking. That treaty, I believe, also got filed in the unequal drawer. Who knew way back in 1898, China at its weakest, the Manchu court and its most rotten foreigners doing whatever they wanted without recourse, Japan suddenly so powerful out of nowhere. This was quite an intense moment for everyone I'm sure. And now all these decades gone by and over the past however many episodes we looked at how this whole Hong Kong story unfolded. So 1982, that dynamic is way changed from 1898 to say the least I might add. But Prime Minister Thatcher, she felt she was on a roll after the Falklands War and in 1982, the Soviets were bogged down in Afghanistan and the US was embroiled in the Iran Contra, Nicaragua, hearings and still cleaning up from the Vietnam War and the Cold War was still going on, still had a few more strong years to go yet. Now the bigger picture for China was the unspoken matter of Taiwan. If China was able to pull off this Hong Kong deal and the right balance was struck between the people's continued freedoms and quality of life and all that that entails, that made unification with Taiwan that much easier. Hong Kong was to be the model that would show Taiwan, "Hey, what are you guys so scared about?" So it was of the most extreme importance to the Chinese side not to botch this whole thing. It got off to a horrible start and from about September 82, right up until 1997, this was one for the history books, I'm going to spare you all the agonizing details and back and forth sparring between the Chinese and British sides at times the negotiations were excruciating. So let's just look at the big picture and not get to bog down in the details. Mrs. Thatcher, when she had her sit down with Deng Xiaoping on September 24 said in so many words, "I got these hair treaties and they say, you know, in Deng Xiaoping wouldn't hair any of this and couldn't believe that for a side like Great Britain that wasn't even holding a pair of twos, how can she come out this strongly and not only that, how dare she bring up these unequal treaties that, you know, China signed under duress." So with the tone set, it didn't go all together too well. And at the farewell banquet, Mrs. Thatcher threw in Beijing, Deng didn't even go. He went to one for Kim Il Song instead. He sent Zhao Ziyang to go represent him. You can imagine how the Hong Kong people felt about all this, watching the news on TVB and ATV every night. It was like a rollercoaster with too many emotional ups and downs. The late David Benavia wrote, "Mrs. Thatcher left the next day, somewhat like one of those typhoons which run in from the western Pacific, leaving a trail of destruction behind them. Seldom in British colonial history was so much damage done to the interests of so many people in such a short space of time by a single person." Most Hong Kong people had nowhere to go. No relatives in Australia or Canada or wherever to help them out. No financial means to pick up and go elsewhere. Most people were stuck there and they were anxious to get the best deal they could. And they had no seat at this negotiating table whatsoever. So far the prevailing attitude was, Britain was going to take care of Britain, and the Hong Kong people were in one form or another, going to be abandoned and left to their own devices with China, who in 1982 was still only six years out of the cultural revolution. And with the negotiations just started, already there was so much disappointment. The Hong Kong stock market tanked. Prime Minister Thatcher dug in her heels and got nowhere. Finally, in February 1983, China let it be known. They had their own unilateral plan in the works and almost complete and would be announced in September '84. The governor by now was another wise China hamster, Edward Yode. Like Mackelhoes, he had earned his stripes in China and spoke the language. There were two camps. The synologists like Craddock, Mackelhoes, Yode, and Wilson, who all suggested one course of action in dealing with China. And the other side led, of course, by Mrs. Thatcher, who felt they had to play it tough. It got so bad that Yode and Craddock flew to London in March of 1983 and told the Prime Minister she had the back down. Once common ground on the most basic points was finally reached between Britain and China. An agenda was agreed to that would first look at how to arrange and ensure stability and prosperity in Hong Kong after 1997. Second, how to handle the lead up to 1997. And third, the matter of sovereignty. So after 10 wasted months since Mrs. Thatcher's disastrous first visit, the ball got rolling. China's deal team was, of course, Deng, calling all the shots assisted by Zhao Ziyang and Li Qian Nian. The main point man in Beijing was Gipengfei, and in Hong Kong they sent the likable and respected Xu Jia Tun. It was up to Xu Jia Tun to listen to as many voices as possible from all walks of life in Hong Kong, and to report back to Deng about the general mood. When he delivered the report to Deng Xiaoping, it could have been summed up in one sentence. Dayed on like or trust us too much, Li Qian Nian decided then that China had to do something to win the trust of the Hong Kong people. Meanwhile, the negotiations were going nowhere, round after round, with Britain still trying to hold on to administering Hong Kong after 1997. Finally, in the sixth round, they backed down, and then things began to make progress. After 12 rounds of talks, finally, they had a deal. For show, the British were going. It might not have been the decision everyone wanted, but at last, everyone knew with certainty what was decided on that score. The Chinese spelled it out in the joint declaration when they said, quote, "The government of the PRC declares that to recover Hong Kong, including Hong Kong Island, Calune, and the new territories, here and after referred to as Hong Kong, is the common aspiration of the entire Chinese people, and that it has decided to resume the exercise of sovereignty over Hong Kong with the effect from July 1st, 1997." And to that, the British countered with, quote, "The government of the UK declares that it will restore Hong Kong to the PRC." with effect from July 1, 1997. Now, keep in mind, all the negotiations were between Britain and China. And every time the Hong Kong people would try to get a word in edgewise, you know, from the governor to Exco and all down the line, Dung made a clear, they had no voice. This was between Britain and China only. This was always a source of great frustration for the Hong Kong people that they had to sit back and let their fate always be decided by others. They didn't have any voice in the matter. When it was all over and all the details had been worked out, the British Foreign Secretary Jeffrey Howe, flew to Hong Kong and announced that the administration of Hong Kong would transfer to China, but Hong Kong would continue its same economic and social systems and would maintain their present autonomy. Good news all around. The stock market promptly rose and erased all the losses suffered since the first Thatcher visit. On December 19th, 1984, Zhao Zeyang and Margaret Thatcher signed the joint declaration and the deed was done. Let me quote from Frank Welsh's book, The History of Hong Kong, page 513, talking about signing the sign of British joint declaration on the future of Hong Kong. "It was certainly the result of much patient negotiation which reflected great credit on all those concerned. Nothing quite like it had ever been done before, an agreement to transfer a territory with a population greater than Norway, Israel, or Ireland, not as result of war, and without the people concerned having any direct say in the matter, an agreement in which China undertook to retain laws, customs, and a social system alien to her own, to allow freedoms denied to her own people to those living in Hong Kong." Well, once the document got into the hands of the Hong Kong populace, you better believe it was dissected down to the molecular level. There was plenty of fault and weaknesses found, but all in all, it wasn't bad. And looking back 25 years after the fact, you can say it worked out quite well and none of these worst case scenarios happened. Next step was the writing of the Basic Law. This would be the Constitution for Hong Kong. As all this was being hashed out, the mood in Hong Kong was dismal. So much was being handled behind closed doors. Within three years of the signing of the Joint Declaration, all the good feelings had evaporated and the mood was sour due to all the uncertainty still. It took another Deng Xiaoping moment to sweep away the uncertainty when he went before the fourth plenary session of the Basic Law Drafting Committee and spoke without notes, saying that China was sticking with socialism and their current system in the interest of maintaining momentum for growth and opening up to the outside world. Hong Kong's basic political and administrative policies would not change for 50 years. He also said for all these years, Hong Kong had always operated under Great Britain, and therefore to expect the place to adopt a British or American style democracy was unrealistic. As far as personal freedoms, Deng said, Hong Kong people could still criticize the CCP as long as they don't turn their words into actions. Worst case, China would use troops. Well, he didn't mince any words and the public reacted favorably. Anything that filled the vacuum of uncertainty was always positively viewed, better to know the worst than to know nothing. You know, Deng Xiaoping had trained his entire life under Zhou Enlai. When this great moment was thrust upon him, he handled it confidently and deathfully. So that's how the whole Hong Kong S.A.R. came about. The Hong Kong Special Administrative Region. Yi Guoliang Jir, one country, two systems. Next step, as I said, was to write the Basic Law. This was the job of the National People's Congress, the Hong Kong people, as usual, not involved. And there came to the fore a man by the name of Martin Lee, Lee Zhu Ming. He was the bet noir for China and all pro-China forces in Hong Kong. He began making a lot of noise once he was able to obtain a platform in the government. He got on the Basic Law Drafting Committee, but later on, he's going to be asked to leave. He became one of the flagship, liberal, progressive, democratic voices for Hong Kong. More about Martin Lee in a minute. Something went down on June 4th, 1989 that really caused a lot of headaches in Hong Kong. The Tiananmen incident caused a predictable uproar in Hong Kong. This was a massive body blow to the often shaky confidence of the Hong Kong people. You know what they were thinking? They saw those tanks rolling down Chang'an Avenue and they were thinking that could be Queen's Road Central one day. So this caused a massive hit to the whole matter of the countdown to the handover. Nobody saw this coming and it couldn't have exploded at a more sensitive time for the Hong Kong people. Despite June 4th and all the aftershocks the event caused in Hong Kong, the Basic Law still got hammered out and was signed with much pomp and ceremony in the Great Hall of the People. It became official on April 4th, 1990 and of course went into effect as soon as the takeover happened. But June 4th was a confidence killer to many. People clamored for special B&O passports that gave them a way out if worst came to worst. The years, right after June 4th, saw a lot of people scrambling for ways out and seeking out passports as a safety net. The worst, however, was over by 1992 and migration began to settle down after that. These were the days when Vancouver was being invaded and all these tiny countries that no one had ever heard of before were offering passports to anyone who came up with the pretty green. And into all this, this new loud cry for democracy and direct elections walked Hong Kong's last governor. We know him today as the Lord Patton of Barnes, the chairman of the BBC Trust, and from July of 1992 to June 30th, 1997, he served as the 28th and final governor of Hong Kong. I lived there in Hong Kong during the entirety of Chris Patton's run as governor, and I could only recall that he couldn't thumb his nose and stick his finger and shine his eyes enough. I remember those years as some of the most acrimonious I ever witnessed between China and a foreign power. Basically from about 1971 until then in 1992, China got lucky. The governors who served during that time, Mackelhose, Yoda, and Wilson, all spoke Chinese, were all synologists, and to a man were considered too soft and too accommodating to China. That's open for debate, but they always believe things should be handled discreetly and within the Chinese context. Then incomes Chris Patton, who was out to teach China a lesson and came in like a bull in a China shop, no pun intended, and stirred things up like you can't believe. In the closing years leading up to the handover, Chris Patton was going to champion reforms that would lead to the ultimate thing China didn't want, directly elected legislators. China liked it the way it was. The deck was stacked in a certain way so that they always had a certain amount of control over the outcome. But if all of a sudden you transferred this power all to the people, well, that was frowned upon. Then this is exactly what Chris Patton tried to do, and the Chinese just went crazy. You see, the June 4th incident, it changed the dynamic and the whole mood in Hong Kong. If not for that, if not for June 4th, it's likely Governor Patton would never have dared to be sold bold with his reforms. Reforms that by the way, China said they would dismantle the next day after they took over. I remember the delay and the construction of the new airport, all due to these arguments going on. Finally, in September 1991 with great fanfare, an MOU was signed, and work could begin at last on that. Great airport we all know and love. Those of us who use it that is. But it was endless stuff like this. Hong Kong authorities and China were constantly taking swipes at each other, and all these voices from China would say the most belligerent things that would just freak some of the Hong Kong people out. In the first Hong Kong elections that had a very diluted form of democracy, it saw all the pro-democracy candidates of Martin Lee's United Democrats when 18 directly elected seats. The pro-Beijing candidates all did poorly, and this of course, sent a bad signal to Beijing. The United Democrats had a lot of support, but not much influence. And of course, the officials in China, you know, scoffed at the election and said, "Well, the NPC still had final say, so who cared how many seats the United Democrats won?" You know, a lot of people in China and all over were saying, "If bringing this kind of democracy was so great for the people of Hong Kong, how come the British in over 150 years never once felt it necessary to introduce it? Why suddenly was it of paramount importance?" And what about the 1971 Immigration Act? That more or less said, no Chinese allowed. So I can tell you, there were plenty of muds slinging on both sides, and the whole matter was emotive and monopolized the news for almost all the years leading up to 1997. Despite all this, Hong Kong's economy was booming. Manufacturing had turned the whole region from Dongguan in China to the West. north all the way down to Hong Kong in the south. It turned it into one single product development, merchandising and manufacturing megalopolis. By the mid-90s almost everything you saw in the stores made in China came from this one single region. While you had all this open warfare between the governor and of course is Enabler, Prime Minister John Major, you also had the Hong Kong economy firing on all cylinders. Now we'll have the Asian financial crisis but that doesn't really blow up in everyone's faces until after 97. Not only was Britain fighting with China about this, even inside Fortress Britain, there was infighting. Percy Craddock representing the synologist faction, you know, who urged moderation and sticking to the joint declaration was in a constant pitched battle with the governor. Man those two did not like each other, didn't hide their distaste. Percy Craddock said, quote, "the reforms in the manner of their promulgation represented a 180 degree turn in British policy on cooperation and convergence. The fact that the US, Canada, and Australian governments warmly endorsed the governor's constitutional plans, confirmed Beijing's instinctive suspicion that there was international backing for such a plan." Where did big business stand on these issues? Hey, they were always on their side and their side unanimously advised not to piss off Beijing. They all felt what was the use of sticking your finger in China's eye over these reforms that everyone knew would be quashed as soon as China took over. The 1991 elections gave a lot of people the confidence that they could change things. But in fact, they couldn't. It got so bad that China's man in Hong Kong at the time, looping, he simply said, "If Britain is reneging on this whole joint declaration, we'll just start setting up our own parallel government. In July 1, 1997, we'll just pull out yours and insert ours." When the next set of elections were held in September 95, the United Dems again had a strong showing. Somehow, everything managed to stay together. And on the evening of June 30, 1997, they had the handover ceremony at the new wing of the Exhibition Center. Prince Charles was there and got severely rained on that afternoon when he read the farewell speech on behalf of his mother, the queen. Janzimine flew in for the occasion. They rushed the opening of Hong Kong Airport to ensure it was ready in time for receiving the president of China what a disaster that opening was. And then there was a firework show to end all firework shows. Maybe the Beijing Olympics topped it, not sure. I watched it all on TV with my children and opted not to fight the crowds that night. And then the next day on July 1, 97, just like any other, nothing changed, and it only got better in my worthless opinion anyway. Now, when I say nothing changed, there actually was some change. Hong Kong's elected legislature was abolished, just as Beijing said it would do, and a Beijing-appointed body of lawmakers took its place. Some civil liberties were rolled back. They had to jump through a few hoops to protest and hold rallies, but it wasn't outlawed. But any form of speech, noting the independence of Taiwan or Tibet, was banned. 156 years of British rule ended. No one could say they didn't do a magnificent thing with Hong Kong. It truly was, in some sense, of the phrase, a barren rock with hardly a house upon it when they found it. So Chris Patton sailed away on the Royal Yacht, Britannia, and Dong Ji-wa became the first chief executive of the new HKSAR. And I promise, in 25 years, we're going to revisit this subject and do an overview of Hong Kong since 1997. This is going to conclude our little history of Hong Kong overview. Man, that was a rush to the finish, wasn't it? I know, but you have to admit, you all know a lot more about Hong Kong today than you did four months ago. As Robert L. Packett himself always says, "I hope you enjoyed that." There's a lot more to the history of Hong Kong than what I covered in these ten parts. For example, we didn't even go into any detail about the role of YK POW leading up to and immediately after the signing of the joint declaration. I'm waiting to get a copy of Anna Somen's book on her father, and then I plan to do a podcast on YK POW using that book as the primary source. I know I skipped over a lot, but I was anxious to get this all finished off in this tenth episode. I think you got the main idea about those final years before the handover. It was quite a beginning and quite an ending. Those 156 years of British rule. Next time we'll look at something new, not sure what the topic will be, but have a few ideas. This is the last podcast episode for the year of the dragon. Next time we convene, it will be the snake year. I hope it's a fab year for you, my incredibly smart and good-looking listeners. This is L.Azile Montgomery of DachineHistoryPodcast.com, wishing you all the best. Take care, everyone. Gong Shi Fah Tsai, Gong Hoshin Shi, Wah Shuru, happy year of the snake. And I hope to see you next time for another dare I say. Exciting episode of the China History Podcast. You're listening to a quick ad. You know what else is quick? Selling your car on Carvana. I'm just putting your vehicle information and we'll give you an offer. I'm done. No hassle, no negotiation, no guy from an online listing lowballing you. Which means by the time I'm done explaining this, you could have basically done it. Still haven't started? 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