From: mok@pa.dec.com (Charles Mok)
Subject: NYT: China Threatens Hong Kong Treaty
Organization: AHKCUS
Date: Mon, 23 Nov 92 21:47:19 GMT

Copyright 1992 The New York Times
November 18, 1992  Late Edition  A1 and A11
China Threatens Hong Kong Treaty by Nicholas D. Kristof

        Beijing, Nov. 17 -- China has sharply escalated its dispute with the
British and Hong Kong authorities by threatening to scrap the 1984 agreement
that promised Hong Kong continued political and economic freedom for 50 years
after the colony returns to Chinese control in 1997.
        The threat was made on Monday night by Deputy Prime Minister Zhu
Rongji, who was in London for talks with British officials.
        "People cannot help but ask whether we still have to stick to the
joint declaration between us, whether the important understanding and
agreement that we have reached should go with the wind," the official New
China News Agency quoted him today as saying.
        China itself would suffer enormous diplomatic harm and economic damage
if repudiated the agreement, so such an action is widely regarded as unlikely.
Instead, the threat appears intended to put new pressure on Hong Kong and
force Britain to back away from its recent proposals to introduce more
democracy in its final years of rule over the territory.
        Still, the bluff -- if that is what it is -- is so threatening to the
existing economic order in East Asia that it creates fundamental new
uncertainties that may hang over the region for years to come.  Mr. Zhu's
remarks sent share prices tumbling by more than 3 percent on the Hong Kong
stock market, where the Hang Seng Index fell 206 points to close at 6,089.
        If the threat were carried out, Hong Kong, a British colony for 150
years, would still revert to China on July 1, 1997. A 99-year lease on most of
the territory expires then, and British has decided that it will return the
entire colony at that time.  In its negotiations with Beijing, London tried to
get the best conditions it could for Hong Kong's residents, but the decision
to hand over the territory is considered final.
        A Chinese takeover without the international guarantees for Hong
Kong's future would have a devastating impact on confidence and investment in
the territory, would trigger waves of emigration by the middle class, and
would crush the spectacular economic boom in both Hong Kong and southern
China.
        Given the enormous stakes, the threat is an indication of the outrage
that Beijing feels voer the British-backed proposals that would make Hong Kong
more democratic -- and thus more difficult for China to govern -- at that time
of the handover in 1997.
        The proposal that most irritates Beijing calls for a vast expansion in
the number of people who can vote for certain kinds of legislators.  China is
also opposed to a proposal to lower the voting age to 18, and is infuriated
that it has not been given a veto over the changes.
        The joint declaration confims that Hong Kong will be returned to China
on July 1, 1997.  But it says that the territory will have "a high degree of
autonomy" and that Hong Kong people can continue to practice capitalism and
enjoy freedom of speech and other civil rights for at least 50 years.
        The agreement is the framework and guarantee for Hong Kong's future
and paradoxically for China's as well, since China get about 55 percent of its
foreign investment from Hong Kong and nearly 35 percent of its trade passes
through the territory's ports.  China does not want to scare off investors and
businesses.
        In addition to the joint declaration is the "basic law" that China has
promulgated for Hong Kong after 1997.  The basic law, a mini-constitution,
promises that Hong Kong can enjoy its autonomy and prosperity after the
handover, but there is deep aprrehension in the territory about whether
Beijing will honor the basic law after the takeover.
        The Hong Kong Government had no official reation to Mr. Zhu's remarks,
but a Governmental official who asked not to be identified said, "It's a new
ball game now, and quite a serious one."
        Martin C. M. Lee, a Hong Kong lawyer who for years has been the leader
of the territory's democracy movement, said in a statement today, Any threats
made by the Chinese Government not to honor the joint declaration will cause
the international community to doubt China's committment not only to this
agreement but to all its international agreements."
        "Threats of this nature by the Chinese Government often have a
counter-effect, in that they serve only to encourage the people of HOng Kong
to stand up for their interest.," Mr. Lee added at a news conference in Hong
KOng.
        The comments by Mr. Zhou came as a surprise to many in Hong Kong
because he is one of the most pragmatic of China's top leaders.
        "We want cooperation, not confrontation, but no one should expect
confrontation to force us into concessions from our stand on the matter of
priniciple," he was quoted as saying by the New China News AGency, which
released a translation.  He reiterated the Chinese argument that the proposed
steps towards democracy violate British promies, threaten Hong Kong's
prosperity, and run contrary to the desires of the people in the territory.
        In fact, public opinion polls show overwhelming support for the steps
toward more democracy.
        Britain for eyars did what it could to suppress the indigenous
democracy movement in Hong Kong, but since the middle of this year has been
far more assertive in supporting democracy despite objections from Beijing.
        The change came when Prime Minister John Major appointed Christopher
Patten, the former leader of the Conservative Party, to take over as Governor
of the territory beginning in July.
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