The Recovery of Hong Kong } 589
over the whole of Hong Kong should be transferred to China if “acceptable
arrangements could be made.”^22 Britain’s acceptance of China’s precondition
opened the way to formal talks and agreement on the Joint Declaration of
December 1984. In an editorial at the time of Thatcher’s death in April 2013,
Beijing’s Global Times summed up Thatcher’s approach in 1982: “Thatcher
managed to understand that China is not Argentina and Hong Kong is not
the Falklands. We can say that she made her biggest compromise as prime
minster in this issue.”^23 Xu Jiatun describes the Chinese reaction when he and
his comrades learned of Thatcher’s capitulation and acceptance of China’s
precondition. After Thatcher’s letter was read out aloud, “laughter broke out
across the meeting room, and everyone was happy about this outcome.”^24
Ambassador Cradock’s role in engineering this critical compromise would
later become a target of criticism by both British and Hong Kong media.
Deng’s “One Country, Two Systems” and Sino-British Negotiations
In 1979, in the immediate aftermath of PRC-US normalization, Deng
Xiaoping began suggesting Taiwan’s unification with the PRC on the basis
of Taiwan maintaining political autonomy, its present capitalist economic
system, and its own armed forces—a proposal that quickly became known
as “one country, two systems.” In December 1982, China’s National People’s
Congress adopted a new state constitution that provided for establishment
of special administrative regions along the lines of Deng’s “one country, two
systems” formula. Taiwan’s leader Chiang Ching-kuo (Chiang Kai-shek’s
son) was not interested in Beijing’s proposal. Instead, Chiang opted to take
Taiwan down the road of democratization.^25 Unused in Taiwan, “one country,
two systems” was transferred to Hong Kong. For many years, Beijing hoped
that the successful application of that model in Hong Kong might, eventually,
at t r ac t Ta iw a n.
In June 1984, after two years of consultation with leading figures in Hong
Kong and deliberation among Beijing agencies, Deng Xiaoping unveiled to
delegations of visiting Hong Kong businessmen the CCP’s “one country, two
systems” framework for governing Hong Kong after its reversion.^26 Under this
framework, Hong Kong would retain its capitalist economy, free lifestyle, and
noncommunist political system for fifty years after returning to China. Its
legal system would remain basically unchanged. The main part of the PRC, of
which Hong Kong would now become a part, would be socialist. Hong Kong,
however, would remain basically unchanged for fifty years. Its status as a free
port, separate customs and tariff jurisdiction, and open financial center would
continue. It would continue to maintain and establish economic and cultural
relations with other countries and regions. In the political sphere, Hong Kong
would become a Special Administrative Region (SAR, thus “HKSAR”). Beijing