China openly declared its intent today to regain control over the capitalist enclave of Hong Kong, lost to Britain in a series of humiliating military defeats dating back to the 19th century.
Premier Zhao Ziyang, speaking to reporters before his first round of talks on the issue with visiting British Prime Minister Margaret Thatcher, said, "Of course, China must recover sovereignty" over what now is an English colony.
Zhao moved to soften the implications of a Communist takeover by stressing that China would adopt "certain measures" to guarantee the well being of the world's third-largest banking center and Asia's main trading outpost.
"I don't think Hong Kong needs to be concerned about the future," said Zhao.
A British official declined to comment directly on Zhao's statement, saying, "We are anxious, as we believe the Chinese are, to maintain the prosperity and stability of Hong Kong."
Although Peking privately has made plain its plans to recover Hong Kong after Britain's 99-year lease on the colony expires in 1997, Zhao is the first Communist leader to state the decision publicly.
Despite his assurances, Hong Kong's future clearly is the focal point of Thatcher's three-day visit as well as an issue of near obsession for the 5.2 million residents, businessmen and investors of the tiny, commercial center off China's southeastern corner.
Hong Kong has had a bad case of the jitters since the Communist government began expressing its designs in private discussions six months ago. The local currency has slumped, land values have dropped about a third, stock market prices have tumbled more than 20 percent and investors have begun sending their capital abroad.
London, accustomed by now to returning prizes of the faded British empire, is believed willing to lower the Union Jack over Hong Kong as long as it maintains the legal right to manage the territory without overt Chinese interference.
Thatcher's visit is just the opening shot of lengthy negotiations to find a formula that satisfies Peking's desire to reassert sovereignty and provides London the legal guarantee it wants to continue operating the area.
Zhao indicated Peking's willingness to compromise. Among ideas floated are an extended transition period under British control or a dual governorship. "The question of sovereignty does not necessarily have to affect Hong Kong's prosperity," he said.
"We're talking," said a British official after Thatcher's 2 1/2-hour meeting at the Great Hall of the People. "That's the point."
One point both sides acknowledge is that China has more to lose from a breakdown of confidence in Hong Kong and its currency than London. As one of Peking's top trading partners, the colony provides China with $8 billion annually, or 40 percent of its convertible foreign exchange earnings. Britain takes away $100 million yearly.
China owns more than $2 billion in Hong Kong property and benefits from the colony's high level of technical and commercial expertise as well as its international contacts.
"Chinese leaders don't want to be remembered as the ones who gave away a piece of Chinese territory to British imperialism, but they also don't want to be the guys who killed the goose that lays the 'golden egg,' " said a West European diplomat.
Nevertheless, Peking's aged leaders -- many of whom lived through China's agonizing years of dismemberment at the hands of foreign colonizers -- consider reclaiming all lost Chinese territory a national imperative.
A clause of China's new draft constitution provides the legal basis for reincorporating lost Chinese territories now functioning under capitalist systems, such as Hong Kong, Taiwan and the Portuguese colony of Macao.
Once reclaimed, these areas would become "special administrative zones," with the right to operate under different laws than the rest of the country -- basically meaning as noncommunist systems.
In July, a top Chinese leader called on "compatriots" in Hong Kong, Macao and Taiwan to study the proposal as a possible solution to "help bring about an early reunification of the Chinese nation."
Shortly thereafter, Hong Kong newspapers began reporting Chinese plans to reestablish at least nominal sovereignty over the colony after the British lease expires in 15 years -- while leaving existing political and economic systems unchanged to prevent a flight of capital and population.
Hong Kong was lost to Great Britain in three separate parcels, starting in 1842 with a treaty ending what was known as the opium war. When the then-ruling Qing empire tried to suppress British trade in opium, the Royal Navy responded with devastating victories at sea. The island of Hong Kong was ceded to Britain permanently.
Eighteen years later, Britain found another pretext for battle and netted as booty the southern portion of the Kowloon Peninsula across the bay from Hong Kong Island. This too was granted in perpetuity.
Finally, the British forced the Qing court in 1898 to lease for 99 years the 370-square-mile lands known as the New Territories that link Hong Kong to the Chinese mainland. The territories, comprising 90 percent of the entire Hong Kong area, technically are the only portion due to revert to Chinese control in 1997. Although the island and southern end of Kowloon were handed over on an indefinite basis, the distinction blurs in reality because they could not survive without the territories to the north.
Even so, the Communist government considers none of the treaties signed by the last imperial government to be binding.