Death of chief protector leaves Hong Kong uneasy

Battle for power looms as Chinese pay tribute to the great manipulator

It is hard to exaggerate the extent to which Deng Xiaoping was personally responsible both for sealing the fate of Hong Kong's political future and for creating the conditions under which the territory has enjoyed an extraordinary period of economic prosperity.

According to the official version of events, Deng turned his attention to the future of Hong Kong in 1978. The Communist Party's Central Committee was preparing its radical programme of economic reform, the scheme for so called "socialist modernisation", and was devising ways of "achieving the reunification of the motherland".

Deng Xiaoping knew that China would never achieve modernisation without help from overseas Chinese compatriots, especially those in Hong Kong. It had long served as China's economic window on the world. Now Hong Kong was to become more than a mere entrepot: it was to provide both the capital and know-how needed to breathe new life into the elephantine Chinese economy.

Deng was also aware that China had the opportunity to realise its historic dream of recovering sovereignty over Hong Kong. The humiliating treaty which ceded a part of the Chinese mainland for a period of 99 years was due to expire in 1997. Hong Kong island itself had been ceded in perpetuity back in 1842, but it was clear that the island could not survive without the mainland territory.

Deeply conscious of Chinese history and his place in it, Deng Xiaoping made it a priority to expunge the disgrace of foreign occupation of Chinese soil. He was not going to be another Li Hongzhang, the Qing dynasty official who signed the treaty handing over Hong Kong to the British. As he told Margaret Thatcher in 1982 "no Chinese leader or government would be able to justify themselves" for failing to secure the return of the territory. "It would mean the present Chinese government was just like the government of the late Qing Dynasty".

However Deng knew it would not be enough to satisfy Chinese national pride; fears of the Hong Kong people also needed to be allayed. More important was to reassure the people of Taiwan, occupied by the anti-Communist Nationalist government, which he also wanted returned to the Chinese fold.

To do so, he developed the "one country, two systems" concept under which, according to Deng, "the main part of China must maintain socialism, but a capitalist system will be allowed to exist in certain areas, such as Hong Kong and Taiwan". Capitalist influences would also be allowed in to "supplement the socialist economy".

This was the genesis of both the idea that Hong Kong could remain capitalist, albeit under the sovereignty of a Communist state, and that other cities, notably in the south, would be allowed to develop along capitalist lines, providing a spur to the rest of the economy.

The breathtaking economic development of the southern parts of the country, aided by Hong Kong and Taiwanese entrepreneurs, succeeded beyond Deng's wildest dreams. Using freedoms carved out by Deng and expanding on them, the new entrepreneurs virtually junked the entire state-controlled economy. Hong Kong, now firmly connected to the powerhouse of economic growth in China, leapt into an era of double digit economic growth and general prosperity. Hong Kong businessmen were ready to deify the name of Deng Xiaoping.

Deng had previously indicated that he did not favour any form of full- scale democracy for Hong Kong and even spoke of the need for the Chinese government to intervene in the colony if instability broke out.

As Deng grew older and worrying reports about his health filled the pages of the local press, there was much talk about how Hong Kong would manage after the great man died. The stock market gyrated in tune with the optimistic and pessimistic reports of his health. But his end was a long time coming, and the jitters gave way to what stockbrokers called a "discounting of the Deng factor".

Nevertheless, it remains hard to dispel fears over the uncertainty produced by Deng's death. Although Tiananmen severely dented his image, Deng retained the status of "Hong Kong's protector". No one else has stepped in to fill this role. With just four months until Deng's dream is realised and the colony reverts to China, the lack of a protector makes Hong Kong people uneasy.

Leading article, page 15