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The Royal Society of Edinburgh Presidential Address Reflections on Hong Kong and China Lord Wilson of Tillyorn Monday

3 October 2011
Report by Jeremy Watson Sovereignty over the once-British territory of Hong Kong was transferred back to China in 1997. Lord Wilson of Tillyorn, a former Governor of the colony and President of the Royal Society of Edinburgh for the past three years, said he wanted to reflect from a personal perspective on the changes over the ensuing years and the impact they had had on Hong Kong and China. Lord Wilson said it is now 14 years since the transfer of sovereignty, but it was apparent that fundamental changes were in motion long before the actual hand-over. When, over 50 years ago, he first arrived in HK to study at the university there as a young man, it was the oldfashioned way, by liner via Saigon. HK was suffering from an influx of refugees from mainland China. It was a colonial backwater, in stark contrast to what it is now. The New Territories were still very rural and the university was not one of the great learning institutions of the world. The population was just three million, with half under the age of 25. In two years of study, he said he had worked for three to four hours in the mornings, with some 30 Chinese characters to learn each day. In the afternoons, he would go into the hills to do his homework while looking out over the Pearl River Delta. HK at that time was a wonderful place to be a student. China was also a very different place. Everything was grey, he said. On the first evening there in 1963 I cycled around Peking at around 9 pm and everything was dead. It was almost an agricultural city that kept agricultural time. The markets were empty and there was very little food. Everything seemed concealed behind walls. Foreigners were not allowed more than 20 kilometres from the centre of Peking. Other cities were out of bounds. When he asked to climb the western hills outside Peking, an area rich with temples, he was told politely but firmly that if he wanted to climb a hill he should try the Coal Hill, near the Forbidden City. It was an artificial mound only 75 metres high! In 1927 it was known in government circles that there were only some 50 years left to run on the lease of HK to Britain. It was in the pending tray, but diplomats had realised, as the deadline got closer the hand-over really did have to be addressed. However, no-one really knew what would happen. The situation changed in 1976 when Chairman Mao died. The Gang of Four, which took over in China, was disgraced later that year, Deng made a comeback and the complexion of HK affairs began to alter. The then Governor of Hong Kong, Sir Murray MacLehose, visited Peking in 1979 and raised with Deng the issue of 1997. Diplomats knew that this issue had to be tackled because sovereignty belonged to China in the long term and the status quo could not remain. UK government asked for individual land leases in the New Territories to be extended beyond 1997, but the Chinese would not consider it. They said no in no uncertain terms, so negotiations had to begin.

He himself had been involved in the summer of 1984, negotiating for two long months in Peking the text of what became the Joint Declaration on the Future of Hong Kong, one of the most remarkable documents in modern diplomatic relations. It set down what would happen for the half century after 1997. HK was to be governed by the Hong Kong people and not directly from the mainland; it would keep its own currency, the HK dollar; education would stay under the control of the HK government, as would aviation. The legal system would remain independent and based on English common law. Remarkably, all this was laid down in the Declaration 13 years before it was due to come into effect. Lord Wilson served as the penultimate Governor of Hong Kong. He explained that although many people at that time were very doubtful about trusting the Chinese, they had, in fact, a good record of sticking to international agreements. My own belief was that they would stick to the Declaration and to all intents and purposes they have, he added. So what did transpire? HK was hit badly by the Asian financial crisis in late 1997, but that was not a consequence of the hand-over. The actual transfer was remarkably smooth, despite continuous rows in the years immediately before it, between the HK government and the Chinese. What the UK was trying to achieve, continuity of administration, happened. Senior positions, such as Chief Secretary and Financial Secretary, were taken over by Hong Kong Chinese, while a number of the more junior administrative positions remained in the hands of expatriates. There were few visible changes either. When India gained independence, street names were changed and statues removed; that didnt happen in Hong Kong. The Prince of Wales Barracks was taken over by the Peoples Liberation Army and the signage removed a few years later, but the shadowy outlines of the original letters can still be seen. One of the major fears was that the PLA would march in and take over, but they have stayed in their barracks as planned. According to Lord Wilson, it has all added up to a remarkably successful transition. The education system has also developed in an extraordinary way. HK University now ranks as the best in China, above Peking and Shanghai. It is now in the top world rankings, showing how important education is to the HK Chinese. The economy is also doing extremely well because of China. The dynamism of the Chinese economy has spilled over and HK has flourished as a result. The population is now 7 million. It has the busiest cargo airport in the world and the second busiest passenger airport. It is a major financial centre, the worlds 11th largest trading centre and ranked as one of the best places to do business. What about the changes in mainland China? Over the last 30 years, economic growth has averaged 10% a year and it has now overtaken Japan as the worlds second largest economy. It has 160 cities with populations of more than one million people and 115 dollar billionaires, second only to the US. It is no longer enveloped in gloomy poverty. It has also encouraged huge numbers of students to go abroad, including 95,000 to the UK. Domestically, the number of university students has expanded exponentially, with a great emphasis on engineering. It started out on this path with very large areas of poverty in the Chinese interior; 200 million migrant workers have moved in to the cities to make new lives. However, there are huge problems building up. Chinas one child policy means 30 per cent of the population are now over 60. One of the greatest changes has been in the freedom to travel. Between 1949 and 1973, just 280,000 Chinese were allowed to leave the country. In 2010, the figure was 57.4 million and this year it is expected to be 66 million. What this symbolises is the strength of Chinese development and the extension of Chinese power abroad. There is massive investment in

Africa, Australia, and South America, from where China is seeking raw materials to fuel its continuing growth. It is Brazils biggest trading partner. Some countries are now worried about the possibility of Chinese domination, but the essential motivation of what China is now doing is to have access to the raw materials it needs to maintain its own growth. Chinese eyes are currently on the Malacca Straits, because of oil and the needs to develop ports to get oil into China. There is now a Chinese naval presence off Somalia, the first time it has had this outside its own neighbouring waters since the Ming Dynasty. Territorial issues have developed in the South China Sea and India, in particular, is concerned about growing Chinese military power. There is economic power too on a global front. The US economy is propped up by 17 trillion dollars of bond debt held by China. This raises the issue of how to react to China as an emerging world power. It is already being brought into significant global issues that often it doesnt want to be involved in. What we need to do, Lord Wilson argued, is to encourage China to be involved on issues such as the threat from North Korea and the global financial crisis, perhaps through the International Monetary Fund (IMF). The main world institutions were designed before the era of Chinese growth and we cannot expect that they will find it easy or desirable to join the western club. What the West should do is prepare to adjust to allow China to participate with engagement on all levels, government, educational and personal. Scotland may be a tiny player in all this, but what the country does is still important, Lord Wilson said. What is encouraging is the number of Scottish schoolchildren now being exposed to the Chinese language. From this will hopefully flow personal and intellectual engagement. In all this, the future of HK must not be forgotten. Two bad statistics have emerged, which reveal the trends. The former colony now has two mobile phones per head of population, so the cacophony is unbelievable. Secondly, property prices are astronomical, with prices per square foot more than twice those commanded in central London. Despite this, Lord Wilson concluded, it remains a place of enormous opportunity and a wonderful place to visit or in which to work. Q&A Q: The Joint Declaration covered the period 50 years after hand-over. Given the rate of change now, should we now be planning for beyond that period? A: No-one is thinking about it yet because China is growing so fast. It will probably sit in a box for another 20 years. My hope is that the Hong Kong experience (post hand-over) will be shown to be successful and I hope that the things we put in place will remain the same. Q: My nine-month-old grand-daughter is learning Mandarin. Should this be encouraged in Hong Kong? A: Most people in HK also speak Mandarin now. This contrasts with the period not so long ago when it wasnt taught in HK government schools at all because they didnt want the population listening to Radio Peking. Q: How do you view Chinese expansion in places like Africa, considering the growth of Islam and Al Quaeda? A: Its not a Cold War-type expansion. That is more of a problem in places like inland China, where there are many ethnic minorities.

Q: Do you see Mandarin threatening English as the worlds main language? A: English remains the lingua franca around the world and also a much simpler language to learn. Characters make Mandarin hard to transmit, so I dont see it transplanting English any time soon. Q: If you visit China, you are impressed by the rate of change. But is there an environmental cost, particularly in relation to the water supply? A: I was shown [aerial] photos of the Pearl River Delta which showed an unbroken line of development for 90km from Guangzhou to Hong Kong. This has developed over the last 20 years and the largest green space was HK. China is paying attention to issues such as water pollution and energy generation, but in talks with officials they say you polluted the environment during your economic expansion 150 years ago. We want to develop now. What they are wanting to do is change vast inequalities in wealth. Q: What about human rights in China? In the case of artist Ai Wei Wei, they seem to have handled it very badly. A: There is a clumsiness in dealing with issues such as this. From the point of view of the Chinese government, it is governing an enormous country with many dialects and issues of poverty. The leaders are worried about chaos. They dont want to go back to the days of the Cultural Revolution. They want to be more pluralistic eventually, but freedom issues are often handled unnecessarily clumsily. Q: Your observations on property prices were interesting. Even ordinary Hong Kongers are faced with paying 1 million for modern apartments. Why is it that HK seems immune to the global property crash? A: It is a serious problem. Action is being taken to cut bank lending on property. One problem is that housing is being bought for investment by buyers in mainland China. Q: Is China a friend or an enemy, an angel or a dragon? A: Its wrong to treat anyone as an enemy; treat them as a potential friend. Work hard and they might become a real friend.

Vote of Thanks The vote of thanks was given by Sir John Arbuthnott, the incoming president of the RSE, who said the audience had been privileged to hear a magnificent lecture. There had been no power point slides, just pictures created by Lord Wilsons own words. He came across as an extremely warm character who wanted to use the personal touch to bring countries like China on board.

Opinions expressed here do not necessarily represent the views of the RSE, nor of its Fellows The Royal Society of Edinburgh, Scotlands National Academy, is Scottish Charity No. SC000470

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