Peking Discussions: The Future of Hong Kong (Hansard, 14 October 1982)

§ Lord Brockway
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ The Minister of State, Foreign and Commonwealth Office (Lord Belstead)
My Lords, my right honourable friend the Prime Minister exchanged views with Chinese leaders on a wide range of international questions and discussed a number of bilateral matters. Prominent among these was the future of Hong Kong. On this she held far-reaching talks in a friendly atmosphere with both Premier Zhao Ziyang and Chairman Deng Xiaoping. Both sides made clear their respective positions on this subject, and agreed to enter talks through diplomatic channels following the visit with the common aim of maintaining the stability and prosperity of Hong Kong.

§ Lord Brockway
My Lords, is the Minister aware that many of us had great sympathy with the Prime Minister in visiting China without the advice of the noble Lord, Lord Carrington? Is it conceivable that she should endorse the immoral treaties imposed on China at the end of the most immoral war this country has ever fought—the opium war? Does he remember that the Tories were then in opposition and opposed 907 the imposition of these treaties and that it was a Whig Government which carried them out? Has not the effect been disastrous both in China and in Hong Kong?

§ Lord Belstead
My Lords, it is true that there is a difference of views over sovereignty. The Chinese position is well known, and my right honourable friend the Prime Minister stated our position clearly. But the great advantage of my right honourable friend's talks with the Chinese leadership is that there was agreement on a common aim to maintain the stability and prosperity of Hong Kong, and the aim of the talks was to build on this. This is the path we are now going down.

§ Lord Gladwyn
My Lords, is it not one of the lessons of diplomacy that in these great matters it is wiser for the principals not to meet until the ground had been well explored at a lower level and some kind of agreement is already in sight?—otherwise there is surely a danger of both Governments taking up rigid positions from which it is difficult for them to depart in subsequent negotiations.

§ Lord Belstead
My Lords, I think it was enormously important that, as a result of my right honourable friend's visit, there was this agreement to enter into talks with the common aim of maintaining the stability and prosperity of Hong Kong. It was necessary, as anybody who takes an interest in Hong Kong knows, for minds to begin to meet on the question of Hong Kong. May I say to the noble Lord, Lord Gladwyn, that, in addition to the subject of Hong Kong, there were extremely valuable talks on other subjects conducted by my right honourable friend.

§ Lord Shepherd
My Lord, I do not believe any noble Lord would disagree with the need for confidence and confidentiality in these discussions, but would the noble Lord not agree that to attain stability and prosperity there must be a degree of confidence in Hong Kong, and that, I think, can come about only by divulging some progress as the talks proceed? Would the Minister consider with the Prime Minister whether from time to time it might be opportune for statements to be made in the two Houses in this respect? Would he also agree that, perhaps as one of the benefits of this procedure, we therefore might not feel it necessary to put down Questions which might be embarrassing at that particular moment in the negotiations?

§ Lord Belstead
My Lords, I am grateful to the noble Lord, Lord Shepherd, for that question and, for reasons which I know are obvious to the noble Lord and to others of your Lordships, the contents of the talks must necessarily remain confidential. But that does not rule out an agreed statement during the talks, if there is anything which ought to be reported.

§ Lord Davies of Leek
My Lords, while not for one moment wishing to denigrate the heroic efforts of our forces in the Falklands, can the noble Lord assure us that we will not move into this very difficult problem 908 in the Far East and in Hong Kong and be dominated by the Falkland Islands syndrome? May we have a calm period now, before we think of beginning negotiations on a real long distance basis?

§ Lord Belstead
My Lords, may I take the opportunity of the noble Lord's question to say that Her Majesty's Government's aim is to preserve the stability and the prosperity of Hong Kong in a way which is acceptable to Parliament and to the people of Hong Kong.

§ Lord Kaldor
My Lords, as the Minister knows, the Prime Minister's visit to Hong Kong was followed by an extraordinary collapse of confidence in Hong Kong—a collapse of stock market prices and of all sorts of things. What I should like to ask the Minister is, whether it is possible that more of the contents of the talks, or of possible provisional agreements, came to be known than is contained in his statement that both sides agree on maintaining the stability and prosperity of Hong Kong. That is not a statement which should give rise to a collapse of confidence.

§ Lord Belstead
My Lords, the noble Lord, Lord Kaldor, reads into the fall in the Hong Kong stock exchange, and the exchange rates, reasons of which, certainly, I am not aware. The noble Lord will, with his long experience, know better than I do that sharp fluctuations in the index are more common on that stock exchange, and indeed on other exchanges, than in western stock exchanges. In August, before my right honourable friend's visit, the index fell because it was heavily centred on property shares. In addition, of course, other Far East indices, notably Singapore and Malaysia, have followed a similar pattern over the year, including an August drop which, again, was before my right honourable friend's visit. And, of course, the level of the exchange rate is tied to a considerable extent to the strength at the moment of the US dollar. Incidentally, as we are talking about this, let us remember that the Hong Kong stock exchange has gone up on both of the last two days, and the exchange rate seems to have settled down to a sensible and stable level. So with respect to the noble Lord, whose experience I always respect and try to follow, I would not read the same lessons into what occurred on the Hong Kong stock exchange as the noble Lord has done.

§ Lord Kaldor
My Lords, I merely wish to say—

Several noble Lords
No!

§ Lord Kaldor
My Lords, I merely wish to ask the Minister whether he would agree that the reason why the violent movements in stock exchange prices on this occasion were associated with the Prime Minister's visit to Peking was that it was so important to the most respectable portions of the British press, such as The Times and the Financial Times. Otherwise. I would agree.

§ Lord Belstead
Then, my Lords, so that there is no misunderstanding at all, and on behalf of the Government, may I make it quite clear that the agreement between the Chinese leadership and my right honour- 909 able friend was that talks should open on the basis of the future stability and prosperity of Hong Kong, and that the aim of the talks should be to build upon those two principles of stability and prosperity. I believe that this was a valuable outcome of my right honourable friend's visit.

§ Lord Brockway
My Lords, would the Minister agree that there is a paradox in that, while we have refrained from extending democracy in Hong Kong in order not to offend the Chinese Government, the Chinese have now themselves proposed the election of the Governor and the association of the people in the administration? Would he hear in mind that we have 15 years in which to reach a settlement, and while it is important that a broad framework of agreement should be reached at an early point, embodying the inevitable Chinese sovereignty and the necessity for economic prosperity, we should leave details in a changing world, including the modernisation of China, for later consideration?

§ Lord Belstead
My Lords, with respect to the noble Lord, I am not sure where his information comes from, but it is not the same as mine. The only information that I have at the moment is that there was an agreement—I repeat it yet again—and both the Chinese leadership and my right honourable friend the Prime Minister agreed that talks should now open on the basis of the future prosperity and stability of Hong Kong. No details were given by either side as to what was to be agreed or discussed within those two paramount parameters, within which the talks should take place. I think that that was valuable, and I believe that, if the talks can proceed on that basis, this very difficult problem can be solved.