Thatcher and Hong Kong
How the 1984 Joint Declaration with China sealed Hong Kong's fate and tested the limits of British diplomatic power.
The Lease That Defined a City
Hong Kong's status was built on three separate territories acquired by Britain at different times. Hong Kong Island was ceded in perpetuity after the First Opium War (Treaty of Nanking, 1842). Kowloon Peninsula was ceded in perpetuity in 1860. But the New Territories — by far the largest area, comprising over 90% of Hong Kong's land — were held on a 99-year lease from China, signed in 1898 and expiring on June 30, 1997.
By the early 1980s, the approaching expiry was creating real problems. Property developers would not invest in 15-year mortgages on land that might revert to China. Banks were nervous. Business confidence was eroding. Something had to be negotiated.
Thatcher initially hoped to argue that Britain could retain sovereignty over Hong Kong Island and Kowloon, which had been ceded in perpetuity, while returning only the leased New Territories. This was geographically and economically impossible — the New Territories contained Hong Kong's airport, reservoirs, and most of its housing. The colony could not function without them.