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China retreats from 50-year pledge of Hong Kong autonomy

Deng's compromise served economic needs that no longer apply for Beijing

BEIJING -- China passed national security legislation governing Hong Kong on Tuesday, jeopardizing the "one country, two systems" policy that was supposed to last another 27 years. 

The arrangement was hatched nearly four decades ago by Deng Xiaoping, then China's paramount leader. It suited the economic ambitions of Beijing, which was eager to develop its country by learning from the territory's capitalist system. But with China having become an economic super power, that dynamic no longer applies now.

Three months after the U.K. won the Falklands War over Argentina, a triumphant British Prime Minister Margaret Thatcher visited Beijing in September 1982, thinking that she was going to discuss the handling of Hong Kong's New Territories with Deng.

The U.K. took possession of Hong Kong Island and Kowloon Peninsula to the north as spoils of the Opium Wars against China's Qing dynasty in the 19th century. Britain later took out a 99-year lease on the New Territories -- a third portion of the Hong Kong region -- which was due to expire in 1997.

But Deng had a different idea. 

"China will restore its sovereignty over Hong Kong in 1997," he said, according to the Communist Party's official record. "There's no room for discussion on this issue."

China wanted back not just the New Territories, but also Hong Kong Island and Kowloon Peninsula.

"We will not become Li Hongzhang," Deng added sternly, referring to the Qing dynasty official notorious for signing unequal treaties with Western powers.

To a stunned Thatcher, Deng followed up with an offer: Hong Kong "can maintain its current government, economic system and most of its laws under China's jurisdiction," the paramount leader said.

The one country, two systems concept -- allowing a capitalist bubble to exist within China's socialist rule -- dates to 1979, when Beijing called for a peaceful unification with Taiwan. The statement, released by the National People's Congress Standing Committee on New Year's Day, broke with the former policy of armed unification. China will honor Taiwan's status quo upon unification, the new document said.

The two systems approach was fleshed out in 1981 when Ye Jianying, who was the chairman of the Standing Committee, submitted a proposal that would designate Taiwan as a special administrative region retaining a government with a "high degree of autonomy" as well as its own army.

But Beijing was forced to put its aspirations for Taiwan on the back burner after U.S. President Ronald Reagan's administration put its weight behind the island. Building relations with Washington was a more urgent priority for Deng. 

The transfer of Hong Kong presented a more realistic option. Seeking to accelerate the opening of the Chinese economy, Deng saw great benefits in taking over the thriving capitalist territory.

At the start of 1982, China officially adopted a policy to take over Hong Kong under the one country, two systems concept. The document written at the time already said the arrangement would be maintained for 50 years, meaning Deng had crafted detailed plans for Hong Kong long before his meeting with Thatcher. 

Britain agreed to relinquish Hong Kong to China when the New Territories lease expired in 1997. Thatcher visited China again in 1984 for the signing ceremony of the joint declaration. The 50-year promise was included in the text.

"We didn't mention '50 years' just on a whim," Deng told Thatcher at the ceremony. "We came up with the number with China's reality and need for development in mind."

Deng likely was being honest. China was only beginning its economic reforms. Learning capitalist concepts through Hong Kong and drawing foreign investment would help the impoverished country gain wealth.

In fact, Deng might have thought even five decades might not be enough for China's economy to attain developed nation status. When Deng met with Hong Kong tycoon Li Ka-shing in 1990, the two discussed the future of the territory.

"Hong Kong will not change for 50 years," Deng said. "After 50 years, there will be no reason to change."

Deng died in 1997 at the age of 92, just five months prior to Hong Kong's return to China, 155 years in the making.

By gaining access to the global economy through Hong Kong, China developed far faster than Deng could have imagined. China's gargantuan economic stimulus program following the 2008 financial crisis has been hailed as a savior of the global economy.

China eclipsed Japan as the world's second-largest economy in 2010. Beijing no longer needed to depend on Hong Kong's strengths.

The Standing Committee of the National People's Congress, China's parliament, passed the Hong Kong security law Tuesday. The legislation will forbid activities promoting "separatism, subversion, terrorism and foreign interference," and will overrule the territory's legal jurisdictions.

Chinese President Xi Jinping was probably planning a security bill covering the territory as far back as 2017.

"The practice of 'one country, two systems' in Hong Kong is a success story recognized by all," Xi said in a speech commemorating the 20th anniversary of Hong Kong's handover. But then the Chinese leader dedicated a significant portion of the speech to the first half of the phrase.

"'One country' is the core of the system," said Xi, who went on the stress the importance of national unity and sovereignty. "Any attempt to endanger China's sovereignty and security ... is an act that crosses the red line, and is absolutely impermissible."

The arrangement Deng believed would last far beyond the 50th year mark is about to be reshaped in its 23rd year. 

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