Hong Kong hand-over (1985)

From the March 1985 issue of the Socialist Standard

In September last year the British and Chinese governments signed a Joint Declaration on the future of Hong Kong, which provided for China to resume control from 1 July 1997. This was the culmination of two years of hard bargaining over the spoils of a sordid nineteenth-century imperialist expansion, which also reveals not a little about twentieth-century capitalism.

Hong Kong Island became a British possession in 1842. In the eighteen-thirties, the Western nations had discovered that there was a vast market for opium in China, and that exporting this would offset the balance of trade, which was very much in China's favour. The massive outflow of silver which resulted prompted the Chinese imperial government to seek to put an end to the opium trade. The British merchants, in particular, resisted and were able to put pressure on their government to send a large fleet out to the South China coast to maintain trading activity. The Chinese armed forces were hopelessly outgunned, and in 1842 the Treaty of Nanjing was signed. The Chinese government paid a huge indemnity, had to open five ports to foreign trade, and ceded Hong Kong Island to Britain in perpetuity. The war itself is known as the Opium War. which gives a fair indication of the high ideals for which it was fought.

Still the rapacity of the British capitalists and their government was not satisfied. More wars and treaties extracted further trading and territorial concessions from China. In 1860, the lower part of the Kowloon Peninsula, and another small island, were ceded permanently to Britain. In 1898, the New Territories, the mainly rural area between Kowloon and the present China-Hong Kong border, were leased to Britain rent-free for ninety-nine years. British capitalism now had an important commercial and shipping base in the Far East.

Hong Kong's economic boom really began in earnest in the early nineteen-fifties. The Chinese "Communist" Party's take-over led to the flight of many capitalists — from Shanghai, especially — to Hong Kong, bringing with them capital which was used to set up textile, construction and shipping businesses. Less wealthy refugees from China provided an ample pool of cheap labour power. Despite its small size, Hong Kong is now a major force in world trade with British, American and local Hong Kong capitalists owning most of its industrial and financial enterprises.

It was this business community which, from around 1980, began to put pressure on the Hong Kong government to find out from China, through Britain, what was likely to happen after 1997. Although the existing treaties stipulate that only the New Territories are to revert to China on that date, Hong Kong Island and Kowloon could simply not survive on their own (Kowloon, for instance, would then have no access to water or electric power). Unless the situation were somehow resolved before 1997, the Hong Kong economy would gradually decline.

This would certainly not be in the interests of China s rulers. Just after the signing of the Joint Declaration. China's Premier Zhao Ziyang said:

a stable and prosperous Hong Kong is beneficial to China's reunification and our modernisation drive, while a turbulent and economically depressed Hong Kong is not in her longterm interest.

China is in fact a major economic force in Hong Kong, owning thirteen banks, a shipping line and countless other companies. In addition, Hong Kong is pretty much a captive market for Chinese produce, foodstuffs especially. In 1982 China was the largest exporter to Hong Kong and enjoyed a trade surplus with the colony of 30 billion Hong Kong dollars. Hong Kong is now becoming increasingly important as a supplier of technology and managerial know-how to China. In the last century, it may have been a small far-off spot of no particular interest to the rulers in Peking, but this is emphatically not the case today:

  Viewed at the most basic level. Hong Kong is a mechanism whereby China converts its home-grown foodstuffs and low-cost consumer goods into hard currency to finance its deficit in trade with Japan, the United States and other countries.
   Since foreign trade accounts for less than 10 per cent of China's GNP. Hong Kong's function might not seem vital. But in fact China uses imports to close crucial gaps in her industrial technology, domestic grain supplies and rare metals.

(David Bonavia, Hong Kong 1997.)

China, then, has an interest in reassuring the present economic overlords of Hong Kong.

It was this background which led to the China-Britain talks about Hong Kong's future. Both sides indulged in the usual pious nonsense, with China claiming that the Hong Kong people desired "reunification with the motherland", while Britain claimed to be representing the same people of Hong Kong. Never mind that many of Hong Kong's inhabitants are refugees who have fled from China, or that Hong Kong has no representative institutions or democratic elections.

The Hong Kong capitalist class would apparently have preferred Britain to have maintained an official presence after 1997, but this is not envisaged by the Joint Declaration. However, China has agreed to maintain Hong Kong's economic system and "lifestyle" unchanged for a further fifty years after that date. As part of China, Hong Kong will form a Special Administrative Region which means, for instance, that taxes collected in Hong Kong will be disposed of there, rather than handed over to the central government. It will remain an international financial centre and free port, with the Hong Kong dollar still being the legal currency. It seems that these and similar provisions will suffice to convince the property-owners of Hong Kong that they will do very nicely both before and after 1997.

China is thus openly committed to maintaining capitalism in Hong Kong until 2047. Its ideologues have attempted to justify this with the slogan "one country, two systems", which means that capitalism and socialism can exist alongside each other. As they point out, capitalist enterprises owned by overseas companies already exist in China, so Hong Kong will not really introduce anything new to the situation. In fact, there is no socialism in China: China is part of the world capitalist system. There is no way in which socialism (common ownership and production for use) can exist alongside capitalism (class monopoly and production for profit).

The Joint Declaration, then, is an agreement between capitalist powers, designed to ensure the smooth continuation of exploitation in a small part of the earth's surface. The exploited — the working people of Hong Kong — have had no say in these talks about their future. The British government has now dreamed up a new form of nationality. British National (Overseas), to cope with them — they will have British passports, but no special rights to settle in Britain. So the poor are manipulated while the rich cream off the profits.

Paul Bennett