Britain Signs Agreement to Leave Hong Kong in 1997

When Great Britain signed an agreement to leave Hong Kong in 1997, the event marked one of the final steps away from Hong Kong’s colonial heritage while bringing into question the territory’s free market status.

Summary of Event

Great Britain first came into possession of Hong Kong Island through the Treaty of Nanking (1842), which settled the first Opium War. Although the sale of Indian opium in China was part of that agreement, the Chinese continued to resist, and after a second war, 1858-1860, China was forced to cede the southern Kowloon Peninsula by the Treaty of Peking (1860). The colony was completed in 1898, when China had to accept a ninety-nine-year lease of an additional 365 square miles, called the New Territories. Although initial expectations in London were that Hong Kong would be of little significance in the empire, the colony developed into an entrepôt for trade with China. It became an extremely valuable possession. China;Hong Kong return
Hong Kong, return to China
[kw]Britain Signs Agreement to Leave Hong Kong in 1997 (Sept. 26, 1984)
[kw]Agreement to Leave Hong Kong in 1997, Britain Signs (Sept. 26, 1984)
[kw]Hong Kong in 1997, Britain Signs Agreement to Leave (Sept. 26, 1984)
China;Hong Kong return
Hong Kong, return to China
[g]Europe;Sept. 26, 1984: Britain Signs Agreement to Leave Hong Kong in 1997[05540]
[g]East Asia;Sept. 26, 1984: Britain Signs Agreement to Leave Hong Kong in 1997[05540]
[g]United Kingdom;Sept. 26, 1984: Britain Signs Agreement to Leave Hong Kong in 1997[05540]
[g]England;Sept. 26, 1984: Britain Signs Agreement to Leave Hong Kong in 1997[05540]
[g]Hong Kong;Sept. 26, 1984: Britain Signs Agreement to Leave Hong Kong in 1997[05540]
[c]Diplomacy and international relations;Sept. 26, 1984: Britain Signs Agreement to Leave Hong Kong in 1997[05540]
[c]Economics;Sept. 26, 1984: Britain Signs Agreement to Leave Hong Kong in 1997[05540]
[c]Expansion and land acquisition;Sept. 26, 1984: Britain Signs Agreement to Leave Hong Kong in 1997[05540]
Deng Xiaoping
Howe, Geoffrey
Thatcher, Margaret
[p]Thatcher, Margaret;Hong Kong
Zhao Ziyang

Until the Communist Revolution of 1949, the British position seemed quite secure. From early in its history, the People’s Republic of China took the position that the treaties creating Hong Kong were “unequal” and therefore invalid. This attitude was not, however, translated into any active policy, and Hong Kong, enjoying free port status, low taxes, and a liberal capitalist economy was eventually the source of 30 to 35 percent of the foreign exchange of mainland China. The mainland also profited by selling the colony water, food, and cotton cloth. Chinese-owned banks and shops thrived as well. Hong Kong’s place in the international economy is suggested by the fact that it was second only to Japan in U.S. investments in Asia. Disturbances in China such as the Cultural Revolution of 1966-1967, despite sometimes causing unrest in Hong Kong, emphasized the colony’s importance as a source of hard currency and continued the push, begun by the 1949 revolution, of refugees to the labor-strapped city. Hong Kong’s population grew from 2.4 million in 1951 to 5.5 million in 1984.

Normalization of Sino-British relations in 1972 resulted in more trade and an increased Chinese economic presence in Hong Kong. Travel between the mainland and the colony was even encouraged. The political confusion after the death of Mao Zedong in 1976 had little effect on Hong Kong, but afterward the authorities on both sides did begin to put effective restrictions on the movement of mainland Chinese to the colony. As far as the status of the city was concerned, Beijing would say no more than that the matter should be negotiated “when the time was ripe.” A Chinese protest was lodged, however, when the United Nations listed Hong Kong as a colonial territory that should eventually be independent. The People’s Republic of China insisted that Hong Kong was an occupied part of China.

By the early 1980’s, the people in Hong Kong were increasingly concerned about the future. The 1997 expiration of the British lease put property mortgages made in 1982 and later in some doubt. (Although technically only the New Territories were leased, the rest of the colony would not be viable without them.) The value of stocks, land, and the Hong Kong dollar fell sharply, despite reassurances from Beijing. In September, 1982, British prime minister Margaret Thatcher conferred with Premier Zhao Ziyang about the colony. The Chinese position was clear: Sovereignty and administration must pass to China, but the economic arrangements might be negotiated. Thatcher insisted that Britain retain administrative control. This deadlock lasted a year during which Hong Kong suffered increasing economic problems.

The next summer, Thatcher yielded. Britain would concede Chinese sovereignty as soon as an arrangement ensuring Hong Kong’s prosperity was settled. In July, formal talks began; they continued for fourteen months. On August 15, 1983, the government of mainland China increased the pressure by announcing that it would take control of Hong Kong on July 1, 1997, regardless of the outcome of the negotiations. For several weeks the value of the Hong Kong dollar fell sharply, leftists in the city asserted popular support for the People’s Republic of China, and Beijing accused Britain of encouraging the economic problems to stall the talks. In September, London took steps to support the dollar, and calm was restored. Progress was slow and steady, but the Chinese began to insist that an agreement be reached by October 1, 1984, the thirty-fifth anniversary of the founding of the People’s Republic of China. The British took no official notice but made the extra effort necessary to meet this deadline. The final agreement was initialed on September 26, 1984.

The resulting Joint Declaration of the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the People’s Republic of China on the Question of Hong Kong, Joint Declaration of the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the People’s Republic of China on the Question of Hong Kong (1984) commonly known as the Sino-British Joint Declaration Sino-British Joint Declaration (1984)[Sinobritish Joint Declaration] along with several addenda detailing and clarifying aspects of post-1997 government, land-lease arrangements, and nationality laid out the situation of Hong Kong after the shift of authority in 1997. The city would constitute a special administrative region of the People’s Republic of China with “a high degree of [domestic] autonomy,” and its government was to be made up of local people, except for the chief executive who would be appointed in Beijing. The existing economic system was not to be disturbed for fifty years after the People’s Republic of China took over, and Hong Kong could continue to participate in international trade organizations and agreements. Military forces of mainland China would not intervene in Hong Kong’s domestic affairs but would be stationed in the city. Rights and freedoms were assured, and China pledged to prepare a Basic Law incorporating the points made in the Joint Declaration.


The Sino-British Joint Declaration was greeted in Hong Kong with a mixture of relief and suspicion that it was too good to be true. It was certainly possible that the People’s Republic of China might renege on parts or all of it, and the promise of governmental and economic systems that vary from the constitutional provisions guiding the rest of the country appeared to be of dubious legality. Few in the city were comfortable with the prospect of the presence of the People’s Liberation Army. By the mid-1990’s, there were some significant indications that Beijing actually intended to honor the agreement. The economy of mainland China certainly needed the foreign exchange to be gained from Hong Kong’s commerce, and special economic zones were created in coastal areas. The acquisition of Hong Kong appeared to fit neatly into this economic policy. Success with the Hong Kong arrangement was, moreover, expected to provide a model for the eventual reabsorption of Taiwan by the People’s Republic of China. China;Hong Kong return
Hong Kong, return to China

Further Reading

  • Bonavia, David. Hong Kong, 1997: The Final Settlement. Hong Kong: South China Morning Post, 1985. Builds on a solid historical framework, first setting the situation of Hong Kong in perspective, but moves rapidly to discussion of the post-World War II era. The author is clearly sympathetic with the people of Hong Kong, but he does not allow his feelings to cloud his assessment of reality.
  • Cheng, Joseph Y. S., ed. Hong Kong: In Search of a Future. New York: Oxford University Press, 1984. Collection of documents and poll results concerning the transfer of sovereignty of Hong Kong. Also contains press accounts.
  • Ching, Frank. Hong Kong and China: For Better or Worse. New York: Foreign Policy Association, 1985. Provides a meticulous account of the Sino-British negotiations that led to the Joint Declaration. An important aspect of the process was the economic and public response in Hong Kong, and the author shows unusual skill in weaving the technical diplomatic arrangements and that response into one piece.
  • Chiu, Hungdah, Y. C. Jao, and Yuan-il Wu, eds. The Future of Hong Kong: Toward 1997 and Beyond. New York: Quorum Books, 1987. Collection of scholarly essays and relevant documents concerning Hong Kong’s likely future.
  • Domes, Jurgen, and Yu-ming Shaw, eds. Hong Kong: A Chinese and International Concern. Boulder, Colo.: Westview Press, 1988. Collection of essays addresses the history and future prospects of Hong Kong.
  • Geddes, Philip. In the Mouth of the Dragon: Hong Kong Past, Present, and Future. London: Century, 1982. Published as a companion to a television documentary, this book is easy to read and provides useful background. It is too old to include data concerning more than the beginning of the negotiation over sovereignty.
  • Kelly, Ian. Hong Kong: A Political-Geographic Analysis. Honolulu: University of Hawaii Press, 1986. Interesting account based on the political geographer’s concept of “landscapes.” Contains much information about the political-geographic elements affecting Hong Kong’s situation.
  • Morris, Jan. Hong Kong. Rev. ed. New York: Vintage Books, 1997. Presents a marvelous mix of travelogue, history, and comment on the situation in Hong Kong as of 1997. Includes chronology.
  • Tsang, Steve. Hong Kong: An Appointment with China. New York: I. B. Tauris, 1997. Provides an overview of Hong Kong’s history and discusses the implications of the handover to China.
  • _______. A Modern History of Hong Kong. New York: I. B. Tauris, 2004. Discusses the history of Hong Kong from the time of its occupation by the British in 1841 to its return to China in 1997. Includes maps and index.

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