Prime Minister
I feel I have been saying so much today that I have said it all before, so let me leave it to you to ask questions.
Question
Have you given it away?
Prime Minister
Given what away?
Question
Hong Kong.
Prime Minister
No. No. I could not give it away. It would have gone back in 1997. Therefore what we had to get was as good a deal as possible for post-1997. If we had not negotiated, we would have got nothing post-1997. So, far from giving it away, I believe that we have gained the confidence of the people of Hong Kong and I believe in [end p1] gaining that confidence of the people of Hong Kong we have managed to do something which will keep the stability and prosperity for the people of China.
Question
Were you terribly worried about the deadline that they had set?
Prime Minister
I did not know whether we would be able to do it in two years—the deadline was extended a little bit as you know—but having set that deadline, the fact was that we negotiated hard and they negotiated hard, and they were prepared to get a much more detailed agreement towards the end, because they wanted an agreement, than some people thought possible. But it was necessary to get a detailed agreement for the people of Hong Kong and to keep the stability and prosperity because it is necessary to get the kind of agreement which is consistent with a capitalist society, and for that you must be fairly detailed, you know, about the law and so on, because the law, for example, embodied in the basic law of entry has got to be consistent and operate in a capitalist society, otherwise you will not get a smooth transition, and if you do not get a smooth transition, you lose the stability and prosperity, so it all hung together. [end p2]
Question
Did you raise the worries of the people of Hong Kong with anyone today?
Prime Minister
No. You have heard me say in almost every speech that, of course, there were some problems, but most of them have been sorted out. There are one or two still to be sorted out, but most of them have been sorted out. But if you looked at the assessment from the people of Hong Kong, I thought it was remarkable their acceptance of the thing as a whole. It was remarkably well accepted.
Question
I wonder if you just took the opportunity at all today to underline that there were a few worries.
Prime Minister
Everywhere we have always said that, of course, there were some worries. Of course, there were some people who had expressed misgivings, but we have got a considerable reinforcement and reassurance that the Chinese will honour their agreement, both verbally from Premier Zhao Ziyang and from Chairman Deng Xaioping, and of course from Secretary Wu Xuequian. [end p3]
Question
At a press conference just before the banquet, a number of questions were asked by Hong Kong journalists which I think has given rise to the line of questioning we are taking, which concerned, would there be democratic elections, would the rights of the citizens of Hong Kong be respected? And Premier Zhao seemed to be so evasive on the subject … .
Prime Minister
The fact is that there is a constitutional Green or White Paper—I am not sure whether it is Green or White—but there is a paper on constitutional development published in Hong Kong that starts the greater election process, but it is indirect election at the moment, by certain groups in Hong Kong. Now, we have obviously got to go much more in that direction, but we have got to go it at a pace that Hong Kong can sustain, and absorb, but that—until 1997 of course, gradually as we come up we consult through the Liaison Group—but that process has already started.
Question
Can you tell us about the Queen's visit? [end p4]
Prime Minister
No, I cannot, yet, because they indicated that they would like to extend an invitation to the Queen some time ago and, as you know, it takes some time to get the Queen's visits from accepting in principle to actuality and I think her royal visits are full next year and I think possibly the first half of 1986, but this visit could—and we hope will—take place in the second half of 1986.
Question
Prime Minister, you sounded very convinced all day that “one country—two systems” will work. What is it that makes you so convinced that it will work?
Prime Minister
First, I mean, let us face it, if we get a smooth transition it will work, because we have already got two systems within the same boundaries as those which will operate post-1997. This is why we have to work so hard in getting an absolutely smooth transition. It is not as if we are dropping something new into Hong Kong in terms of an economic system. What we are striving to do is to retain that stability and prosperity and lifestyle that is already there, so within the present boundaries of what will be the boundaries after 1997, two systems already work. So it is striving to retain that, and we had absolute assurances again and again, very [end p5] anxious the Leaders of China to assure the people of Hong Kong that China traditionally keeps her agreements and will keep this one.
Question
Have you sought any extra assurances from the Chinese leaders about the role that the people of Hong Kong will be able to play in drawing up the basic law?
Prime Minister
Yes, they have already said and said again today that the basic law will reflect what we have agreed for the annexes and in drawing up the basic law they will solicit the opinions of the people of Hong Kong on a wide basis. The undertakings are that what is contained in the Annexes will be in the basic law in any event, and that is so—indeed it must be—because the basic law must be the basic law covering the things in the Annexes and consistent with the operation of a free capitalist society, and also be consistent with the Courts of Law as they operate in Hong Kong. So it was mentioned twice today.
Question
Was there any indication that the people from Hong Kong will be able to take part in the drafting process? [end p6]
Prime Minister
Not the drafting process, no. They will be consulted. Their views will be—the official word is “solicited” —and I do not go beyond that because that is the direct translation of what they said. Obviously, the actual drawing up of the basic law must be drawn up by China, but the agreement is that the things which we have agreed in the Annexes to the Agreement will be reflected in the basic law. Insofar as that is not covered in the Annexes, they will consult widely with the people of Hong Kong before or during drawing up the basic law. And they will have the basic law complete by 1990.
Question
Was it actually made clear that representatives of Hong Kong would not be sitting actually on the Drafting Committee?
Prime Minister
Well, you would not expect representatives from Hong Kong to sit on the Drafting Committee, because it would be drawn up by the Chinese, but it has got—under the terms of the Agreement—to reflect, mirror, whichever word you use, the actual Agreement between China and ourselves in the Annexes to the Agreement. In other words, all of the details which we agreed there. [end p7]
Question
Did you clarify the presence and position of the Chinese Army moving into Hong Kong, being stationed there and possibly … .
Prime Minister
We have nothing further to say there.
Question
Prime Minister, the Chinese gave very strong hints all throughout today that after the problem of Hong Kong has been solved, as they see it, that trade between Britain and China would grow. Have they given any actual firm guarantees or ideas on that?
Prime Minister
There are several ideas, but in any event trade with China at the moment is growing and, as they pointed out to us, our share of the trade they do with the outside world is smaller than it should be and smaller than they would like it to be. So under the existing amount of trade which they do with the outside world there is scope for considerable increase by Britain.
There are several projects, as you know. Right now, BP is here in the South China Sea. Last time I was here we did a Memorandum of Understanding with Cable and Wireless which we then turned into a contract in London. There is Guangdong Power Station which GEC are in for the turbines. There are a [end p8] number of other things going. There is Shell Coal, but also, they have been importing for a long time our mining equipment. Their coal seams and ours are very similar.
Either the last time I was here or the time before, there was a delegation from Glasgow which included mining equipment manufacturers. Then there are aluminium smelters where we built an aluminium smelter in Dubai. There is scope for orders on railways and, as you know, we are quite good at rolling stock. There is scope for orders on British Aerospace. So we got down to quite a lot of detailed contracts.
Question
You seem to have played down the question of the report on the Gorbachev visit, both you and official statements by the Chinese, what took place in the talks, or your account of what took place in the talks. Both your version and the Chinese version seemed to say that you just mentioned it in passing rather than discussed it at any length. Is that an accurate representation?
Prime Minister
I think we gave a very brief impression. It is accurate, yes, that is right. We were not really here to discuss that in detail, but they had noted the reports that had appeared and I gave a very quick account of my impression. [end p9]
Question
It was clear from Deng 's speech that he does attach a great deal of importance to your role. I beg your pardon, from Zhao 's speech. That he attaches a great deal of importance to your role.
Prime Minister
Yes, Zhao Ziyanghe did. When you say Deng XiaopingDeng's speech. We did actually discuss it more with Deng than with any others but you would expect us to be with Deng on the more broad approach, both on Hong Kong and on East-West, and we certainly did discuss it with Deng and, of course, do not forget they have got Argopoth (phon.) coming here tomorrow, so certainly Deng was very interested.
Question
Prime Minister, my apologies for straying off the Hong Kong subject, but this evening you did mention the British economy in your speech tonight … this evening, Sterling has fallen to another low … it is becoming very close to parity with the dollar.
Prime Minister
Well there is quite a way to go before parity with the dollar … is it $1.17? Well, you know the reason. It is one of these very difficult reasons. It is the price of oil, but there are some people who will welcome a fall in the price of oil but, unfortunately, it does have an effect on Sterling [end p10] and we are the one currency in Europe that is affected by the price of oil and, of course, being a producer if the price of oil falls then obviously it affects our income.
From the viewpoint of the British consumer, it has the irony that the price of oil can fall, yet that causes a sharper fall in the value of Sterling compared with the Dollar than the price of petrol can rise. I do not know what the precise relationship will be, but the price of oil has been very uncertain for several days now. It has already had its effect on Sterling and is continuing to have its effect on Sterling. If we got the coal strike off, then it might have a very good effect. On the other hand, the fact that we are having to buy quite a lot of oil at the moment will be beneficial in other effects.
Question
It also, of course, has a direct effect on imports …
Prime Minister
The price of oil, yes, insofar as we are buying in oil. Anything invoiced in dollars is mainly oil.
Question
May I ask is the Government prepared to see a parity with sterling? [end p11]
Prime Minister
It is not a question you ask. We have a free exchange market and if you have a movement you can move in temporarily but you cannot move in permanently. I mean, if I could tell exactly what would be happening, so would other people and it would not happen, because they would already have made their dispositions so it would have a different effect than that which they intended.
Question
The people of Hong Kong feel that the future has been decided without any consultation on their part.
Prime Minister
That is just not true. I am sorry. I will never answer a question on a false premise. You know that is not true.
Question
Representation on their part then.
Prime Minister
Representation to whom? Many people have been up from Hong Kong to Peking. Frequently EXCO and LEGCO have been to see me, the last a few days ago. The Young Professionals have been to Hong Kong … . have been to Peking … . Hangi Cook (phon.) have been to Peking. It was always understood from the beginning that it was our job closely to [end p12] consult with the people of Hong Kong and if I might point out, Sir Edward Youdethe Governor of Hong Kong has been at the talks—not being represented at the talks, but has been at the talks, and they asked me that right at the beginning.
Question
Do you think it is unreasonable for the people of Hong Kong to want actual representation in the basic law … .
Prime Minister
That is not the point. The basic law is the law of China. You would expect China to draft the basic law. As the basic law affects the special autonomous region of Hong Kong, the basic law will reflect the specific agreements we have reached on Hong Kong and insofar as those are characteristic of any other special region which they may wish to set up, the basic law will refer to those as well.
Speaker From Platform (?)
Most parts of the basic law are already provided by the Agreement … expect to stick to that Agreement … that this Agreement and … stick to the basic law.
Prime Minister
And the word “stipulated” is used in the Agreement. [end p13]
Question
So do you think it is unreasonable for the people of Hong Kong to insist that … . people of one system be drafting the basic law for another system … .
Prime Minister
Tell me, who in Hong Kong is insisting that? You used the phrase “the people of Hong Kong” . Insofar as it is affecting Hong Kong, that basic law as Sir Percy CradockSir Percy said, is stipulated in the Annexes to the Agreement, as you will know. If you have read the Annexes and read the Agreement in full, you will find your answer there.
Question
If the basic law comprises Annex 1 and nothing more …
Prime Minister
Insofar as we have influenced the basic law by virtue of the Agreement with special effect on Hong Kong, it is in the Annexes and there is in the Agreement a stipulation—to use the words of the Agreement—that the basic law will reflect what is in that Agreement. And also there is further than that … there is an undertaking that China will solicit—to use their word—a wide range of opinion in Hong Kong about the basic law.
Question
How will the British Government raise the question of the aspects of the … . [end p14]
Prime Minister
Through the Joint Liaison Committee or through diplomatic channels. There are two channels.
Question
And you will be monitoring the basic law quite closely?
Prime Minister
Oh yes, of course. Of course. We have a Joint Liaison Committee and we have diplomatic channels and we have an Agreement. That is one reason why we insisted that we have a fairly detailed Agreement, because we realised the basic law would in fact be of great significance to Hong Kong, so I have got a detailed Agreement.
Question
There would be a suspicion that if relations between Britain and China … . (inaudible) … . Britain might not be prepared … .
Prime Minister
I must say I totally and utterly reject your cynical approach. If you really want to upset agreements which do great benefit to the people of Hong Kong, that is the way to go about it!
Question
Prime Minister, can I ask you a question unrelated to Hong Kong? Back home in England, the Secretary of State [end p15] for Transport, Mr. Ridley, is quoted as saying that he faces a constitutional problem now that the Stansted Bill has been voted out by the Standing Committee.
Prime Minister
They have not in fact agreed on the Sittings Motion again; that is the second time.
Question
He said that this poses a constitutional problem and I understand that there are calls for him to quit. Are you satisfied with Mr. Ridley continuing … .
Prime Minister
Mr. Ridley is absolutely first class. I think the problem is that where you get an application for a new airport or an extension of an existing airport and an application for an extension of Heathrow, this matter has been around now for so long that, whatever you do, it will be bitterly and deeply opposed by some particular group, and I think now we shall have to take the full report which I have not yet read—it is 2,500 pages and I doubt whether you will have read it because it is not yet printed—and I think we shall just have to take some decision as quickly as we possibly can, having considered all aspects, because you can see the problem with these major planning applications. There are rival groups; each makes its protest, and that is what is happening now, and [end p16] we shall have to try—having got the Inspector's Report—to look at it very carefully. Then we are pledged, before we take a decision, to have a debate in the House of Commons and we shall have, as a Government, to make a decision. Otherwise, everyone will want effective air services, effective air travel. No-one will want it in their particular area and there will not be any effective air services or effective air travel. It will have a very damaging effect, so we have to look at the whole thing and come to a decision and lay it before the House—but not until, of course, there has been a debate in the House.
Question
Prime Minister, you apparently had a pretty rough encounter with Mr. Deng in 1982.
Prime Minister
I would not call it a rough encounter; I would say it was realistic encounter.
Question
Could you compare the two meetings—today's meeting and the 1982 one?
Prime Minister
I do not think “rough” is quite the word. “Realistic” is the word. I mean, our job is to stick up for the people [end p17] of Hong Kong and to get the very very best deal for them that we can after 1997, which is the date when the lease on 95%; of the territory terminated. We did carry out that responsibility and I believe—and I believe they recognized it—discharged it very effectively.
But yes, of course, we did our very best day after day after day after day, week after week, month after month, for the people of Hong Kong, and I think that the result is good for the people of Hong Kong, and when I think of where we would be now if we had not started that process two years ago, there would be far less confidence now if we had the great unknown of the negotiation still ahead.
Question
How did you find him? What was his demeanour?
Prime Minister
Pretty lively, very vigorous, very up-to-date.
Question
Both sides mentioned that there has been tense periods during the talks, which we all know, but what would you say was the main point of difference between the two sides that prompted both sides today to say there have been tensions during the talks? [end p18]
Prime Minister
Well, one of the things we had to do is to make certain we got the detailed Agreement, because only in that way could you in fact make provision that the basic law would include certain details which are absolutely essential if you are to get a smooth transition. And do not forget a capitalist legal system and the legal system of the Western-style society is totally different from the system which operates in China. You must have continuity of your courts and your legal system, so you must have the basic law drafted to take into account the things in the legal section of those Annexes. That is one example.
So we had to have details and then, of course, there were certain things … I am not going to go into them in detail, but one or two things, yes, which did give problems. I am not going to go into them in detail, because I want that Agreement to work and if we are going to go over and over again things which have been settled, it is not really going to help.
Question
Would you say then that the talks were an educative process from the point of view of the Chinese?
Prime Minister
The talks were, as we expected, long-lasting because the two systems are very different and therefore we had to make certain that the Agreement provided in detail to reflect [end p19] the system of a capitalist system and the lifestyle of Hong Kong and yes, of course, that took a time. I think we have all learned a lot. It is not only one side. Incidentally, you are getting considerable changes in Chinese law as they open their society outside to a good deal more investment and obviously people turn round and say: “What law governs us?” and therefore they are developing their company law quite quickly.
Question
(Very faint) … although the Commons welcomed the Report a lot of MPs suggested that an annual report to Parliament would be a good thing. Do you favour that?
Prime Minister
I do not think the subject will be able to disappear into the background because of the people of Hong Kong and because there will be a Joint Liaison Committee which certainly will not begin to sit in Hong for four years. It comes into being when the Agreement comes into force but it does not take its seat in Hong Kong until 1988. That Joint Liaison Committee will start very quickly and the fact is that we are still responsible until 1997—wholly responsible—for the administration of Hong Kong, so it is not as if you put anything on the back burner; it is going to be right on the front burner. I do not see that the annual report will be necessary to effect your purposes. It will be effected by [end p20] the fact that there is a Governor of Hong, there is a Joint Liaison Committee and by our actual responsibility for administration of Hong Kong.
Question
Mrs. Thatcher, to revert to the domestic situation, Mr. Ridley has been in some trouble, Mr. Jenkin we gather is in some trouble too, and Mr. Thatcher has been making comments about the pound coin and him not being a member of the Government. Do you get the feeling that as soon as you are out of the country everybody runs riot?
Prime Minister
No. No. I just get the feeling that you get all of these things out of perspective. As I say, I remember when a great treaty obligation, the European Economic Community Bill, was passed by eight votes. I remember when there was a Bill to put through the abolition of retail price maintenance in a Parliament when we had a hundred majority … was passed by one vote. I remember the Suez Group, and so I do not find some of these things unusual at all. I remember going to the decimal system. I remember the 50-pence coin. I remember getting rid of the farthing. I remember going from yards to metres. I still have not got used to it. I still measure my carpet in yards and I still order dress material in yards. So what are you fussed about? I remember many many planning appeals and do not forget that there will be [word missing] coming up too. I remember when I first became an MP in 1959, a file which was [end p21] handed over to me by my predecessor whose name most of you will not remember—some older ones will—Sir John Crowther for Finchley handed me a file about widening the A.1 through Archway and through Hampstead Garden Suburb. That is still not decided!
Question
(re the pound coin but inaudible)
Prime Minister
Well does it matter if we do? There is not a monopoly of opinion in our house. Is there in yours? Good!
John Osmon
In the space of one week you have seen Gorbachev, you have seen the rulers of China, on Saturday you see the President of the United States. We hear today the Chinese leaders talking about stability. A few years ago they were talking about the inevitability of a third World War.
Do you honestly think that there is a possibility of some sort of great change coming about on the great issues of war and peace … .
Prime Minister
I think you are right to put your finger on a kind of change which has come about, I would say, in the last three or four years. Do not hold me to that! I personally, have [end p22] not believed, ever since we had a nuclear deterrent that there would be another war in Europe, provided we kept the nuclear deterrent and kept our conventional forces effective, because I have believed, and you have made me make speeches about it, the prospect of nuclear war was so horrific that it is unlikely ever to be embarked upon, and in effect, the nuclear weapon has given us a greater degree of peace and security than any other we have known for a long time. Indeed, I think when I spoke to the United Nations, it must have been in 1982, one pointed this out and said we hope one day we will find some means of having stability and security not as horrific as the nuclear weapon, but the fact is that the existence of that nuclear weapon has been a great deterrent to war across Europe and there have been 142, 150 now I suppose, other conflicts in the rest of the world, when I originally made this speech … I have been amazed how many people have taken it up … where you have not had nuclear weapons. That does not mean that you wish for the extension of nuclear weapons, because at the moment I think they are in the hands of comparatively few nations and I think that is right. I do not want proliferation. But certainly I have not believed for many years that there would be another war across Europe, provided we were staunch in our defence and we kept out ultimate nuclear deterrent and NATO kept its nuclear deterrent so you got a balance—what Winston ChurchillWinston called a balance of terror.
I think now quite a number of other nations are coming to believe that, but basically they are coming to believe in [end p23] balance and deterrence as a method of achieving peace and security, but the balance is critically important. Wars do not come about because of considerable stockpiles of armaments. Wars come about, if you look historically, when nations that have territorial ambitions or power ambitions become very strong and their neighbours—or those over whom they have ambitions—become weak. It is the strength allied to the weakness that is the cause of war. Strength facing strength is a deterrent to war and I think the fact is that more and more people are coming to take that view and what we are now on the verge of with the disarmament talks is that unless we start disarmament talks now, there is a possibility that weaponry will go to a new step change in technology. It has to some extent already started and because people can see it I think that they are prepared to go to the disarmament talks with the Soviet Union wanting disarmament. They of course put up the first anti-satellite satellite. We have nothing like it. America then had to have a reply to try to get a missile that would destroy a nuclear weapon. Now it has had only one experiment yet, but the Soviet Union has already put up an anti-satellite satellite, the United States has now done one single experiment under which a missile managed to find the entering missile and to kill it and because you are on the verge of those technological advances I believe this is one thing that has brought the Soviet Union back to the negotiating table. There is still quite a long way to go before they are able to decide how those disarmament talks can be conducted, in what fora, and it is one thing to say there is an umbrella concept, that [end p24] to some extent means that there is as yet no decision as to whether you go back to strategic ballistic missiles, INF missiles, chemical warfare or conventional and whether you go sea-based, land-based, air and so on, and in my view, that is now very complicated and it will take some time to work out the fora in which the disarmament talks will in future be conducted.