One Country, Two Systems: Hong Kong and Beyond
Deng's formula for reunifying Hong Kong and Macau with China while preserving their capitalist systems — and its implications for Taiwan.
The Hong Kong Question
Britain's 99-year lease on the New Territories (the bulk of Hong Kong's land) was set to expire in 1997. Negotiations between Deng and Margaret Thatcher in the early 1980s were tense — Thatcher initially hoped to extend British administration, but Deng was unyielding on sovereignty.
The result was the Sino-British Joint Declaration of 1984, which established the 'one country, two systems' framework. Hong Kong would return to Chinese sovereignty but retain its capitalist economy, independent judiciary, and civil liberties for 50 years — until 2047. Macau followed a similar arrangement with Portugal, reverting in 1999.
Deng originally conceived 'one country, two systems' as a formula for Taiwan. The idea was that demonstrating the model's success in Hong Kong would persuade Taiwan to accept peaceful reunification. Taiwan has consistently rejected the offer.