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1996 - Mr Major’s Speech in Hong Kong

Below is the text of Mr Major’s speech given in Hong Kong at the British Chamber of Commerce and the Hong Kong General Chamber of Commerce on Monday 4th March 1996.


PRIME MINISTER:

Mr Chairman, Mr Governor, Ladies and Gentlemen. I am delighted to have the opportunity of being back here in Hong Kong. It is now just over a quarter of a century since I first came here, working in that occasion for the Chartered Bank. I had arrived to carry out an inspection or two and you can recall how popular I might have been.

Hong Kong of course has changed very greatly since my first visit. In fact, to be frank, it has changed quite a bit in the four and a half years since I was last here. But not I think changed for the worst. The doomsters, the gloomsters, always with us in this part of the world and elsewhere, have been proved wrong again and again. There have been arguments certainly, arguments about principles certainly, arguments about things that mattered, of course, arguments but no disasters.

Later on I shall have some announcements to make about the future. But before I turn to those, let me just spend a moment or two on what has actually happened. Hong Kong has become the world’s eighth largest trading economy, up from 10th four years ago; your foreign exchange reserves have risen by 60 percent, from 29 billion US dollars to around 52 billion, they are now the second highest per head anywhere in the world; your gross domestic product has gone up by a quarter, it now corresponds to over one-fifth of China’s GDP, a truly astonishing achievement for a territory with a population of 6 million at a time of uncertainty; your spending on public services has gone up by 75 percent on education, by 99 percent on health, but because you have grown overall and restrained expenditure elsewhere, expenditure as a proportion of your income has remained about 16 percent of GDP - in European terms an almost unimaginable statistic; taxes meanwhile have been cut, cut, cut, cut and cut again, not as far enough clearly as some of you would have wished, but I can tell you I would happily defend a 15 percent rate of income tax back home. Your top rate of salaries tax, that infamous 15 percent, now has to be paid by only 2 percent of the working population, though I do appreciate that many of that 2 percent will be present here on this occasion.

And when you just have a look at some of those indications of what has happened in Hong Kong, it is no wonder it has become an even more international city. Over 200 more regional headquarters than in 1991, as well, as 11,000 more Britons, 11,000 more Americans and almost 9,000 more Japanese.

There have been other visible signs of progress as well. The last time I came here I had just returned from Peking where I signed the Memorandum of Understanding for the airport. There was no West Kowloon reclamation, no new airport, no Tsing Ma Bridge - I saw both of them just yesterday; no convention centre extension, a great building, a building which will quite literally become one of the best known buildings anywhere in the world; no British Consulate General which is going to be, by some measure, our biggest Consular post in the world, a symbol of Britain’s commitment to the future of Hong Kong.

So Hong Kong, as so often in its history, has defied the pessimistic smart Alecs. Indeed it has defied the odds. You have shown that it is possible to prosper while standing up vigorously for your way of life, the way of life, the freedoms and values that generate the prosperity that you can see right across Hong Kong.

People often ask: what can we learn from Hong Kong? The best answer is go to Hong Kong and see for yourself, see the energy, the dynamism, the sheer guts in business enterprise, the determination to make the best of life however unpromising it may sometimes look, to think positive and to act positive. And those are some of the reasons why Hong Kong packs such a big punch in Asia and right around the world.

Last week I attended a meeting of European and Asian Heads of Government in Bangkok, the first meeting of its kind, an initiative long overdue and one I welcomed with enthusiasm. There are very few foreign policy questions that matter more today than the relationship between West and East, between Europe and Asia. Hong Kong is at the heart of the economic relationship between the two. Annual two-way trade is worth 40 billion US dollars. Literally thousands of European firms are based here, doing business not only in Hong Kong but in the whole region. And what a remarkable region it is, north to China and Japan, south to Australia, West as far as India.

Europe has no better market and no better business base in the whole of this vast and booming region. And that is why Hong Kong needs to be involved in any economic follow-up to the Heads of Government meeting in Bangkok last week. Hong Kong of course is already a member of APEC and the World Trade Organisation.

And Britain occupies a special position in this relationship, and I am not talking here just about the historical link, vital though that is, I am talking about something a good deal broader than that. Hong Kong is the Europeans’ first choice as a base to do business with Asia. Across the globe the United Kingdom is the Asians’ first choice as a base to do business with Europe, Asian banks in London, European banks in Hong Kong. Japanese, Korean, Taiwanese and Hong Kong investment in Britain exceeds Asian investment in the whole of the rest of Europe added together. European, especially British investment, in Hong Kong far exceeds other external investment in the territory. This is partly a product of history, indeed everything is partly a product of history, but it is very much also a product of present circumstances of hard-headed calculations about the future.

Asian businessmen naturally wish to increase their stake in the world’s largest market - Europe - and they have calculated that much the best gateway is the United Kingdom. And they come to Britain because we share a common belief in enterprise. They like our relatively low taxes, not as low as yours of course, but Britain now enjoys the lowest tax burden of any major European economy and when possible we intend to get them lower still. They like our low inflation, Britain is enjoying the longest period of low inflation it seems for over 50 years. They like our commitment to free trade and fair competition. They like being treated on exactly the same basis as domestic investors. And they like a country that has resisted Europe in burdening employers with extra costs. In Britain, for every 100 pounds spent on wages, an employer has to add an extra 18 pounds for non-wage costs, 18 pounds in the UK but an extra 32 pounds in Germany, 34 pounds in Spain, 41 pounds in France and 44 pounds in Italy. So no wonder Britain remains the first choice for foreign investors coming to Europe - low taxes, low inflation, low costs.

My aim is to turn Britain into the enterprise centre of Europe, an economy that rewards get up and go. Now that may sound familiar to you. We seek those virtues, you have them here in Hong Kong, they are the economic virtues of Hong Kong. And just as I would like Britain to be the enterprise centre of Europe, I see Hong Kong as the enterprise centre of Asia, the channel for European trade and investment into the huge markets of China and Asia.

Overseas investors flock here for exactly the same reasons. And they come here because underpinning all these policies, Hong Kong has the most important legacy that Britain has given to its former colonies across the globe - the rule of law. You are all here, and your businesses and your families have thrived here precisely because of the rules of law. You have been able to enjoy living here, without interference from government, without harassment from the police, with a confidence that a contract once signed is a real contract, not just the beginning of year upon year of negotiation, with confidence in a fair and transparent legal process in which no-one is above the law, with confidence that the tendering process is fair and that all your companies can compete in an open market according to the same rules, and with confidence that there is that free flow of information, uncensored and unfiltered which is so vital to market decisions. You have benefited too from the work of the truly exceptionally dedicated civil servants of Hong Kong who set such high standards of administrative ability and can-do spirit.

The rule of law in Hong Kong, the rights and freedoms of Hong Kong, the free flow of information, all that has been crucial to the development of Hong Kong as the pre-eminent business centre of this region. Who doubts, who seriously doubts that if Hong Kong had not developed its laws and had not preserved its rights and its freedoms, its success as a world centre for business would be far, far less than it is today?

Twelve years ago the Chinese government clearly recognised these important facts of life when they undertook, in the Joint Declaration, to maintain Hong Kong’s laws, its rights, its freedoms and the application here of the International Human Rights Covenants. Why did they do that? It was because they saw that it was in their Chinese interests that Hong Kong should continue to thrive and develop as an international business centre. They knew that it was in this role that Hong Kong could best contribute to the spectacular modernisation of China. And they saw, wisely, that Hong Kong’s formula for success was one that included as vital ingredients, not optional extras, the rights and freedoms that the people and the businessmen based here had been guaranteed for years under the law.

We have been working with China in order to achieve a successful transition incorporating these elements. The road has not been smooth but we have kept at it so far, and we will keep at it in future. The Chinese Foreign Minister’s visit to London in October last year, and the Foreign Secretary’s visit to Peking in January, allowed detailed and businesslike discussions on all aspects of the transition. My own meeting with Premier Li Peng last week has confirmed our commitment to this process. Our consistent aim has been to forge agreements which are clearly in the interests of Hong Kong and which will ensure the continuity of Hong Kong’s systems and Hong Kong’s institutions.

There is still much to do, but a good deal has been achieved since the Joint Declaration of 1984 agreements on Hong Kong’s membership of international bodies like the World Trade Organisation; on the Court of Final Appeal; on the future of defence lands; on the network of international treaties applying to Hong Kong; on agreements that the pessimists said at the time could not be done, and much else besides. So the groundwork has been laid for the final phase of the transition, for the final push.

The overriding priority in this period of the transition must be to maintain the rule of law and ensure that it commands the confidence of the local community and the international community after 1997. That has been the number one item on Chris Patten's agenda for the last three and a half years. It is the number one item on the British government’s Hong Kong agenda over the next year and a half. If the rule of law does not rule the market, you enter it only with the greatest of caution, because you never know whether your contract will stick, whether your competitor has an inside track that you cannot hope to compete with, or even whether you will find yourself arbitrarily detained in a commercial dispute. But if you know that the market is ruled by law, you can commit yourself to it whole-heartedly. It is why we believe, and will continue to believe, that the voice of the people of Hong Kong, plainly heard in free and fair elections in 1994 and 1995 must be respected. We didn't suddenly dream up that proposition by ourselves, it was a central feature of the Joint Declaration, agreed by Britain, agreed by China as the necessary underpinning for the confidence of the people of Hong Kong in the maintenance of their way of life.

We are quite clear that electoral arrangements, passed by the Legislative Council in 1994, were and are wholly compatible with the Joint Declaration and the Basic Law. Those elected by the people of Hong Kong, in record numbers, should be allowed to serve their full four year term. That is what Hong Kong people wish to see, that is what the world would wish to see, that I am convinced would also be in China’s, as well as Hong Kong’s best interests.

We have insisted too, therefore, that the laws of Hong Kong should not be changed by decree in 1997, that the human rights of Hong Kong people must continue to be protected in every respect, as they are now, including the obligation to report under the international covenants, and that the interests of all who live, work and invest in Hong Kong will be given equal treatment under the law after 1997 as they are today.

We have put these arguments, arguments both of principle and of sensible practice at the highest levels to the Chinese leadership. Malcolm Rifkind did so in Peking in January, I did so with Premier Li Peng last week. In response he confirmed China’s commitment to key elements of the Joint Declaration, but we reached no agreement on LEGCO or on the Bill of Rights. We did not agree to disagree, we just disagreed.

We are not going to leave it there. We are not going to go on saying in public and private something we don’t believe, we will say only what we do believe. We do not, and we will not, simply lie down and accept what we are told.

Let me reiterate what Malcolm Rifkind said to LEGCO in January:

If there were any suggestion of a breach of the Joint Declaration, we would have a duty to pursue every legal and other avenue available to us but standing up for Hong Kong way of life isn't only a job for British ministers. If Hong Kong people want the undertakings made in the Joint Declaration and the Basic Law to be fully and faithfully honoured, they too will have to be prepared to stand up and say so and that goes for all walks of life, lawyers, journalists, civil servants, businessmen, policemen.

Hong Kong businessmen have a special responsibility not least because many of the opportunities you have to make these points lie with interlocutors in China and your interests will be directly affected if things go wrong. If you don’t appear to care about the survival of Hong Kong’s system, its rule of law, clean government and a free society, then others may draw the conclusion that they don’ t really matter but of course they do and everybody in this room knows that they matter.

British sovereignty will end on 30 June 1997. A chief executive will take over the reins of one of the most challenging jobs in the world in which he or she will need the support of Hong Kong and the understanding of the international community. The flags will change, Britain will no longer have colonial responsibility for Hong Kong but Britain’s commitments to Hong Kong will not end next summer, far from it. The guarantees in the Joint Declaration extend for 50 years until 2047, the Joint Liaison Group will continue to function until the year 2000. That means that we in Britain will have continuing responsibilities to the people of Hong Kong, not just a moral responsibility as the former colonial power and as staunch friends of Hong Kong but a specific responsibility as a signatory to the Joint Declaration. We shall watch, vigilant, over the implementation of the treaty to which Britain and China have solemnly committed themselves. That treaty is of course registered at the United Nations but it will not just be Britain which will be watching, which is watching now over the implementation of the Joint Declaration. We shall ensure that others are watching as well Hong Kong will never have to walk alone. Every trading nation, every country engaged politically, economically or commercially with China and with the whole East Asian region has a direct interest in Hong Kong’s continuing success, not just success but success founded firmly on the specific promises made by Britain and made by China in the Joint Declaration, every member of the international community, all Hong Kong’s friends and partners around the world in both hemispheres and five continents will be watching to see that the letter and spirit of the Joint Declaration are honoured now, next year and for 50 years beyond and we will be making sure that they do.

Our commitment - our British commitment - to take such a lead does not stem just from our moral responsibility; it is powerfully reinforced by Britain’s own self-interest. After the handover, there will still be a massive British presence in Hong Kong, a thousand British companies operate here, our investment in Hong Kong is around £70 billion sterling, our exports to china are £800 million per year but to Hong Kong they are £2.7 billion a year. Moreover, some 200,000 people here will be British citizens, some 3 million may be holders of British National Overseas passports, up to 2. 4 million may hold Special Administrative Region passports. Whichever passport Hong Kong people hold, they are concerned about ease of travel. It is an important issue, important for Hong Kong’s self-confidence as well as for its economy and trade but Hong Kong knows that we are living in a world of more restrictive visa regimes because of the abuses which governments are rightly expected to tackle.

At present, British National Overseas passport-holders have visa-free access to the United Kingdom. That will continue, there are no plans to change that. The question now is whether the United Kingdom should also extend visa-free access to future holders of the Special Administrative Region passport. I have reflected carefully on this with Cabinet colleagues in London in the light of the powerful arguments put by the governor, by the Legislative Council, by business people and by the wider community in Hong Kong in recent months and the answer is yes, we shall extend visa-free access [Applause]. We have decided that holders of SAR passports will not - I repeat will not - be required to obtain visas for visits to Britain after 30 June 1997, there will be visa-free access. This will be an improvement for many Hong Kong people who held Certificates of Identity at the moment and who at present require visas to enter Britain; from July 1997, with an SAR passport they will not.

I hope that this decision will be welcomed in Hong Kong. We shall be placing the details before Parliament in London today. In addition, the British Government will also be urging other like-minded countries around the world to follow our lead, to do what they can to maximise ease of travel for Hong Kong people after 1997. In particular, we look to the incoming sovereign power, to China, to work with us in promoting visa-free travel for Hong Kong people whatever passport they may hold. We hope that China will place all this on a firm foundation by bringing forward soon fair, practical arrangements for ensuring that all those who have right of abode in Hong Kong now continue to do so after 1997.

There are two other immigration and nationality matters which have been raised many times by Hong Kong people: the position of the wives and widows of ex-servicemen who fought for Britain in the War and that of the non-Chinese ethnic minorities in Hong Kong after 1997. Let me address first the question of the non-Chinese ethnic minorities with no nationality other than British.

This is a limited group; their right of abode in Hong Kong after 1997 is guaranteed by the Joint Declaration; the British Government have made clear that any member of this group who would otherwise be stateless will be entitled to British Overseas Citizenship as will their children and grandchildren. We have also said repeatedly that if against all expectations, any solely British nationals come under pressure to leave Hong Kong, the British Government of the day would consider with considerable and particular sympathy their case for admission to the United Kingdom. Let me make clear today to this group that we are prepared to guarantee - repeat to guarantee - admission and settlement if at any time after 1 July 1997 they were to come under pressure to leave Hong Kong. It is the position of course, that this group do not wish to leave Hong Kong, they are settled here, their business is here, their families ties are here but they wish to be sure that if they come under pressure to leave that they will have a country to go to. Mr. Chairman, from today, they have that assurance [applause].

The second matter concerns the wives and widows of ex-servicemen from Hong Kong. The Home Secretary has written personally to each of them to make clear they are free to come to the United Kingdom at any time and to settle there if they wish. What they continue to press for is full British citizenship in view of their husbands’ service to the Crown in time of war. Because the numbers involved are extremely small, this is an issue that could be satisfactorily dealt with by a Private Member’s Bill in Parliament. The Government would be happy to see such a Bill come forward and would encourage and facilitate its passage through Parliament. As a result, these ladies will then receive full British citizenship [applause]. Let me summarise the assurances I have been able to give today:

First, Britain’s commitment to Hong Kong will continue well beyond the summer of 1997. That is both our moral responsibility and overwhelming in our own self-interest.

Second, if in the future there were any suggestion of a breach of the Joint Declaration, we would mobilise the international community and pursue every legal or other avenue open to us.

Third, we will give visa-free access to holders of the passport of the Special Administrative Region.

Fourth, we are prepared to guarantee to the ethnic minorities admission and settlement in the United Kingdom if after 1997 they were to come under pressure to leave Hong Kong.

Fifth, we will facilitate a Private Member’s Bill to give British citizenship to the wives and widows of the ex-servicemen from Hong Kong who fought in the War.

Mr. Chairman, these five points will I hope help to provide reassurance to you, the people of Hong Kong, about Britain’s active interest in your future.

As I said earlier, Hong Kong is at Europe’s and Asia’s crossroads, 1997 will not change that. Europe’s ties with Asia are ties of culture, of commerce, of history. That is especially true of Britain - of 24 Asian countries 8 are members of the Commonwealth. Britain is the largest European investor in China and in Asia as a whole but nowhere do we have as large a stake as we have here in Hong Kong.

Will Hong Kong continue to succeed? You have succeeded magnificently already often against the odds. You have been an example to the world of what can be achieved by an open-market economy. It is your values - Hong Kong values - that are being copied all around the world. It is Hong Kong that points the way in the region. “Made in Hong Kong” is stamped these days on ideas and values, not just on toys and on textiles so it matters that Hong Kong continues to succeed, it matters to Britain, it matters to China, it matters to the world that Hong Kong succeeds.

Next summer, the eyes of that world will be on Hong Kong, the world’s television cameras will be trained on the Territory, the world’s journalists encamped here literally in their thousands. For the next sixteen months people everywhere will be asking one question over and over again: “Will it all survive? Will it all work?” I am sure that it will, sure with one caveat, with one qualification, to be honest with one “if”: it will work and survive, as Anson Chan has said, if you remain true to yourselves, if you remain true to your values, true to the values that helped you create here in this Chinese city a community that is decent and prosperous, mightily successful and the whole world hopes abidingly free - not just now but for the future. Thank you very much! [Applause]


QUESTIONS AND ANSWERS

QUESTION:

Mr. Chairman, Mr. Major represents the Westminster tradition of democracy, the home of free speech and so forth. In a meeting here with Mr. Rifkind here he dodged this question. I would like to ask you to answer it:

The question simply is: Given the situation in which 6 million people are being handed to a country and a government which over 70 per cent do not want, how on earth can you sleep comfortably at night?


PRIME MINISTER:

I think you put it in the most aggressive way possible [Applause] and in the tradition of Westminster democracy, don’t be surprised if I am tempted to reply the same way!

When you say “handed over”, you are a businessman, you enter into deals, you operate under the rule of law. We operate under the rule of law as well and the rule of law required that on 30 June, whether we like it or not, the British lease on Hong Kong actually ended. That is not a matter of an option, not a renewable option, it was a matter of international law. I don’t like it any more than you like it but I have to obey the law, I can’t simply address a reality as though it were a fiction and ignore it so our responsibility is to make sure that we mobilise our resources in negotiation and our resources in international pressure to make sure that the law is fully obeyed and to make sure that the agreements that have been reached between ourselves and China are fully obeyed as well and if you are inviting me to upend the original agreement that ends on 30 June 1997, hope you are not also going to say to me that I should take a tough line with the Chinese if they don’t obey the agreements and the law that they made in 1984 with Geoffrey Howe and Margaret Thatcher because this Colony exists because of the rule of law and that is something the Westminster tradition has to obey as well - and we will - but our interests in Hong Kong do not disappear, they don’t find people handed over bound hand and foot and powerless; that is not remotely the way things are going to be in 1997 as I have just spent the last half an hour trying - I hope successfully with many but perhaps not with you - to explain to people. [Applause] I think it is very doubtful that Malcolm Rifkind dodged the question but by God, I am not going to!