Before the negotiations In the wake of Governor MacLehose's visit, Britain and the PRC established initial diplomatic contact for further discussions of the
Hong Kong Question, paving the way for Thatcher's first visit to the PRC in September 1982. Margaret Thatcher, in discussion with Deng Xiaoping, reiterated the validity of an extension of the lease of Hong Kong territory, particularly in light of binding treaties, including the Treaty of Nanking in 1842, the
Convention of Peking in 1856, and the Convention for the Extension of Hong Kong Territory signed in 1890. In response, Deng Xiaoping cited the lack of room for compromise on the question of sovereignty over Hong Kong; the PRC, as the successor of
Qing dynasty and the
Republic of China on
the mainland, would recover the entirety of the New Territories, Kowloon and Hong Kong Island. China considered treaties about Hong Kong as unequal and ultimately refused to accept any outcome that would indicate permanent loss of sovereignty over Hong Kong's area, whatever wording the former treaties had. During talks with Thatcher, China planned to seize Hong Kong if the negotiations set off unrest in the colony. Thatcher later said that Deng told her bluntly that China could easily take Hong Kong by force, stating that "I could walk in and take the whole lot this afternoon", to which she replied that "there is nothing I could do to stop you, but the eyes of the world would now know what China is like". After her visit with Deng in Beijing, Thatcher was received in Hong Kong as the first British Prime Minister to set foot on the territory whilst in office. At a press conference, Thatcher re-emphasised the validity of the three treaties, asserting the need for countries to respect treaties on universal terms: "There are three treaties in existence; we stick by our treaties unless we decide on something else. At the moment, we stick by our treaties." The additional Article would hold tremendous significance in settling the question of Hong Kong and later
Macau, putting into social consciousness the concept of "
One country, two systems".
Negotiations begin A few months after Thatcher's visit to Beijing, the PRC government had yet to open negotiations with the British government regarding the sovereignty of Hong Kong. Shortly before the initiation of sovereignty talks, Governor Youde declared his intention to represent the population of Hong Kong at the negotiations. This statement sparked a strong response from the PRC, prompting Deng Xiaoping to denounce talk of "the so-called 'three-legged stool", which implied that Hong Kong was a party to talks on its future, alongside Beijing and London. At the preliminary stage of the talks, the British government proposed an exchange of sovereignty for administration and the implementation of a British administration post-handover. The PRC government refused, contending that the notions of sovereignty and administration were inseparable, and although it recognised
Macau as a "Chinese territory under Portuguese administration", this was only temporary. In fact, during informal exchanges between 1979 and 1981, the PRC had proposed a "Macau solution" in Hong Kong, under which it would remain under British administration at China's discretion. The conflict that arose at that point of the negotiations ended the possibility of further negotiation. During the reception of former British Prime Minister Edward Heath during his sixth visit to the PRC, Deng Xiaoping commented on the impossibility of exchanging sovereignty for administration, declaring an ultimatum: the British government must modify or give up its position or the PRC will announce its resolution of the issue of Hong Kong sovereignty unilaterally. In 1983,
Typhoon Ellen ravaged Hong Kong, causing great amounts of damage to both life and property. The Hong Kong dollar plummeted on
Black Saturday, and the
Financial Secretary John Bremridge publicly associated the economic uncertainty with the instability of the political climate. In response, the PRC government condemned Britain through the press for "playing the economic card" in order to achieve their ends: to intimidate the PRC into conceding to British demands. At one point Deng made it clear that he had no intention of continuing any British administration in any part of Hong Kong. In regards to the treaties establishing British control over Kowloon and Hong Kong Island, Robert Cottrell of
The Independent wrote "In practical terms, the treaties were worthless, sovereignty would be China's in due course, and any row about it would certainly damage Hong Kong in the short term whatever the eventual outcome." The PRC took this as yet another plot by the British. The Hong Kong government explained that it had been informed about the move only a few days before the announcement. The government would not and could not stop the company from making a business decision. Just as the atmosphere of the talks was becoming cordial, members of the
Legislative Council of Hong Kong felt impatient at the long-running secrecy over the progress of Sino-British talks on the Hong Kong issue. A motion,
tabled by legislator
Roger Lobo, declared "This Council deems it essential that any proposals for the future of Hong Kong should be debated in this Council before agreement is reached", was passed unanimously. The PRC attacked the motion furiously, referring to it as "somebody's attempt to play the three-legged stool trick again". At length, the PRC and Britain initiated the Joint Declaration on the question of Hong Kong's future in Beijing.
Zhou Nan, the then PRC Deputy Foreign Minister and leader of the negotiation team, and
Richard Evans, British Ambassador to Beijing and leader of the team, signed respectively on behalf of the two governments. ==Sino-British Joint Declaration==