Margaret Thatcher: The Authorized Biography, Volume 2

by Charles Moore

  Although Cradock and Howe often found Mrs Thatcher tiring to deal with, they also appreciated her utility when they talked to China. She was ‘marvellous’, recalled Howe, ‘as a card off-stage’.131 She was the demanding mistress, he the endlessly patient emissary. She reminded Cradock of Jorkins in Charles Dickens’s David Copperfield. Jorkins is the largely absent business partner of nice Mr Spenlow, who ‘finds it convenient to turn him [Jorkins] into a hard man, an ogre, to whom he can attribute refusals of any inconvenient request’. ‘We operated’, Cradock went on, ‘on the same principle … with the difference that our Jorkins, in London, needed no invention.’132 The London ogress, Cradock believed, did understand that ‘it was a matter of brute power,’133 and that therefore China was much the stronger party; but she also understood that she could increase Britain’s small supply of brute power by playing up to her role. In the view of Charles Powell,‡ who succeeded Coles as her foreign affairs private secretary the following summer, her ‘original ridiculously unobtainable goals’ made it possible for Britain to demand and get more than anyone would otherwise have dared.134 ‘ “If the Chinese think you’re being difficult,” she told the Foreign Office, “just tell them who can be really, really difficult.” She was a tiger kept in a cage.’135 According to one of those who accompanied Mrs Thatcher in Peking, the Chinese respected this: ‘They felt great admiration for her because she was the Iron Lady. They were very impressed by how well she dressed: they thought of her as a proper, serious leader.’136

  Mrs Thatcher’s other crucial role was in maintaining the confidence of the people of Hong Kong. To the Foreign Office, and particularly to Percy Cradock, who had the perfectionist’s dislike of any exterior interference, China was a subject only diplomats understood. The Foreign Office sinologists were a sort of priesthood, and Cradock was their high priest, the keeper of the sacred mysteries. He felt that Hong Kong people would simply get the wrong end of the stick and annoy China if they were even informed about, let alone allowed to take part in, the unfolding process. It was the job of Edward Youde, the Governor, to stand up for Hong Kong people, and this he did conscientiously. But since the British colony had always avoided introducing democracy, they lacked their own political champion. Mrs Thatcher was the nearest they had to one. She understood more clearly than colleagues that the confidence in capitalist Hong Kong which everyone, even the Chinese Communists, wished to maintain, depended much more on whether Hong Kong people believed in the future than on whether Britain and China could get all the sub-clauses right.*

  At every turn in the negotiations, Mrs Thatcher could be found pleading these people’s cause. In late September 1983, for example, when Cradock’s ‘first finesse’ (see Chapter 1) had not worked, the Hang Seng index had fallen by 15 per cent in a week. He was softening her up to make a further concession (the ‘second finesse’) on sovereignty. She told Howe that Cradock’s talk of maintaining prosperity and stability was beside the point unless it was recognized that ‘The prosperity is due to 1. Chinese character. Plus 2. British system & administration.’137 In December, as Cradock pressed harder for Mrs Thatcher to concede that no link of authority between Britain and Hong Kong after 1997 would survive, Mrs Thatcher wrote, ‘The most difficult thing is acceptability to the people of Hong Kong … If I were a Chinese in Hong-Kong I would be getting worried that we [that is, Hong Kong Chinese] were not involved in the negotiations.’138 At roughly the same time, Mrs Thatcher was contemplating comparable problems about how much to consult the people of Northern Ireland about their own future. As will be seen (see Chapter 10), they were also kept on the sidelines. In both cases, she was the only important person in the British government who constantly (though often without success) bore this dimension in mind. She did so with greater determination over Hong Kong than over Northern Ireland.

  She also made herself available, as often as she could, to see the ‘Unofficials’ – the non-governmental executive and legislative advisers to the Governor who, as much as anyone, represented Hong Kong opinion.* She tended to see things from their point of view and told them frankly that she feared the Chinese ‘had no concept of a free society’.139 In the spring of 1984, when Howe informed her that China was now seeking a say in running Hong Kong before 1997, she wrote, ‘Until now EXCO have said “at least we have until 1997!” Under this, they haven’t. And before long we shall be pushed further.’140 On the same day, Sir S. Y. Chung,† the head of EXCO, protested to Youde that this was ‘the last nail in the coffin. We had gained nothing from the process of negotiation and had been forced into constant retreat.’141 Without the sessions in London in which Mrs Thatcher listened to the Unofficials for hours, sympathized with their woes and tried to reassure them that the government would not abandon them, it is doubtful whether their nerve would have held. It is also doubtful whether Britain would have fought so hard for the interests of Hong Kong people.

  For the Chinese government, who regarded Hong Kong as inalienably theirs, the idea of Hong Kong people having a say over their future was a heresy, even a reward for being unpatriotic. Deng, in particular, felt this strongly. Although he genuinely wanted to preserve Hong Kong’s capitalist success, he found it difficult to understand that this depended on confidence and continuity which could not survive too much Chinese bullying. He also feared that Britain was insinuating sovereignty for itself and was engineering runs on the Hong Kong dollar to frighten him. He could not credit the British government’s repeated, truthful assertion that it got no profit from the colony.142 In his mind, there were piles of gold lying around which Britain from time to time smuggled out. ‘Deng himself is not only suspicious and ill-informed’, wrote Cradock, ‘but impatient.’143* In the early part of 1984, China applied maximum pressure. It insisted on Deng’s inflexible deadline for agreement – September 1984. It demanded that a Joint Liaison Group to help China prepare for the handover be set up in the colony itself, thus frightening Hong Kong people who thought it would become ‘an organ of power’. Unbending on its own definition of nationality, China seemed to threaten the 3 million Hong Kong people who carried British Dependent Territory passports with either capitulation or statelessness.

  By early April 1984, Hong Kong nerves were strained almost to breaking point. At an emotional meeting in London with the Unofficials, Sir S. Y. Chung warned Mrs Thatcher that the colony ‘would become ungovernable long before 1997’.144 By the time Geoffrey Howe visited Peking for talks later in the same month, the Chinese had already rejected the British draft agreement as a basis for discussion. They also told Howe, to his dismay, that China would garrison Hong Kong with a detachment of the People’s Liberation Army after 1997. When he returned to Hong Kong, he publicly announced – information which until then had been held privately – that the British administrative link would be broken entirely in 1997. This was, he later recalled, ‘the most anxious moment of my life’.145

  ‘It seems as if the Unofficials were right in their judgment of the Chinese,’146 Mrs Thatcher wrote privately as this process unfolded. She felt with Hong Kong, and tended to berate Howe and the Foreign Office, though no one could say they had not warned her. She felt strongly, in a way that Percy Cradock did not, that, as S. Y. Chung put it to her after Howe’s announcement, ‘To transfer land was one thing. To transfer people was another.’147 That she, the great Cold Warrior, might end up delivering a free people to Communism was an unbearable thought. That she, the victor of the Falklands, should fail to help a pro-British colony was, if anything, even worse. But, however tempted, she never gave up on the negotiations. She reluctantly accepted Cradock’s analysis that China was absolutely determined to win the full outward form of sovereignty and power, but would be flexible about almost everything else. His metaphor was of a house. China had to have the house, but had few ideas about how to furnish it: that was Britain’s chance to make a difference.

  Mrs Thatcher therefore overruled objections from Youde and the Unofficials and agreed that Britain should try t
o meet the Chinese deadline. She accepted the view of Howe and Cradock that Howe should go to Peking again in July and do everything decently possible to secure agreement there. To empower her Foreign Secretary, she wrote a secret letter to her counterpart, Zhao Ziyang. It expressed her desire to conclude the talks on time, but emphasized that there must be an agreement which she could honourably put to Parliament. The idea of the Joint Liaison Group located in Hong Kong, she said, ‘particularly disturbed’ her and threatened to undermine government in Hong Kong.148 Progress could be made, she said, if the question of location could be put aside for the time being.

  Howe arrived in Peking in late July, accompanied by Cradock. At a lunch with his interlocutor, Zhou Nan, on the first day, Cradock was told that the Chinese leadership were ready to concede delay in starting the Joint Liaison Group, to continue its work after 1997, and to accept the terms of reference for it that Britain wanted, so long as everything was settled in the next two or three days. The Chinese encapsulated what they wanted for Hong Kong after 1997 in the formula they had first conceived in relation to Taiwan – ‘One Country, Two Systems’. Cradock considered this ‘the moment of truth’,149 and agreed as much with Howe under a flowering tree in the garden of the government guesthouse, the location he chose to avoid being bugged. He duly cabled ‘Jorkins’ in London. She gave ‘encouragement, but not carte blanche’.150 In two days, questions that had stalled for years were suddenly settled. On 31 July, as a mark of the importance of the moment and perhaps of his victory, Deng Xiaoping himself arrived after a five-hour train journey from his seaside holiday resort. Agreement was reached. Now that the Chinese believed they had got the recognition of the sovereignty they had always claimed, they could be more flexible. As Howe’s team reported it to Mrs Thatcher: ‘Deng said this was very good. The Chinese side had the highest trust in the Secretary of State and the Prime Minister. They had come to that conclusion in the course of the Hong Kong negotiations. He was full of confidence that One Country Two Systems would work.’151 Deng even invited the Queen to visit China.

  In his telegram to Mrs Thatcher explaining everything, Cradock said that these three days in Peking had been ‘make or break’. Britain had got a deal which would be legally binding. Its detail could therefore develop the Basic Law by which Hong Kong would be ordered. It would be an agreement, rather than a unilateral Chinese promulgation. Deng should now be flattered with ‘undue credit’ for the idea of One Country, Two Systems, which was not, in fact, his own. ‘We shall be inept’, Cradock concluded, ‘if we cannot manage it now.’152 Whatever critics said about Cradock, he was not inept. The Chinese had won the house, but the British were indeed ready to furnish it. With relief and generosity rare in her dealings with the Foreign Office, Mrs Thatcher wrote: ‘Thank you – many congratulations to you both [that is, Howe and Cradock] – it was an excellent result – progress beyond all expectations.’

  When Mrs Thatcher saw the Unofficials the following month, Sir S. Y. Chung told her that he could commend the Agreement to the people of Hong Kong ‘in good conscience’.153 Mrs Thatcher thanked him. That phrase, she said, had ‘very deep significance’ for her.

  Mrs Thatcher agreed to fly to Peking for the signing of the Agreement – known as the Joint Declaration – in late December 1984. It formed part of an astonishing week in her life which began with giving lunch to the Soviet heir-apparent, Mikhail Gorbachev, in Chequers, continued in Peking and Hong Kong, and ended with President Reagan at Camp David (see Chapter 8). For her trip, she requested a book by Liu Shaoqi, who had been a comrade of Chairman Mao and president of China, until Mao turned against him for being a ‘capitalist roader’ and subjected him to torture which may have contributed to his death in 1969. The book did not express Mrs Thatcher’s personal ambitions: it was called How to be a Good Communist. After Mao’s death, Deng had rehabilitated Liu’s reputation: she sought to understand how any Communist could be good – or at least, how some could be better than others.

  Charles Powell was in the prime ministerial party, which arrived at Peking airport at night. In those days, he recalled, the city was virtually dark, with the road ‘a single track between trees with lots of chaps wobbling about on bicycles’. Mrs Thatcher travelled into town with the Chinese Foreign Minister and an interpreter. ‘Get in there,’ Percy Cradock told Powell, pointing to the car’s jump-seat, ‘and tell us what they say to each other.’154 ‘It was very stuffy and slow,’ recalled Powell, ‘and I fell asleep. When we all got out, Cradock and Youde rushed up to me and asked, “What did they say to one another?” Not wanting to seem an idiot, I said, “To be honest, it’s so secret, I don’t think I can tell you.” ’

  Before the signing the next day, Mrs Thatcher met Deng in the Great Hall of the People. He was grown old and deaf, and ‘There was a lot of shouting at him down an ear trumpet.’155 Deng told Mrs Thatcher that the Agreement had ‘historic significance’ and that China would honour it.156 Mrs Thatcher, following Cradock’s advice, praised ‘One Country, Two Systems’ as a ‘stroke of genius’. Deng said, ‘The credit should go to Marxist dialectics or “seeking truth from facts” [one of his famous anti-Maoist slogans].’ Socialism would not have been acceptable to Hong Kong or to the United Kingdom, he told her.*

  Mrs Thatcher asked Deng why he had agreed to one of the most precious features of the deal, which was that One Country, Two Systems would last for at least fifty years from 1997. He answered that it was because China ‘hoped to approach the economic level of advanced countries by the end of that time’.† For her part, she pressed on Deng the ‘doubts’ that Hong Kong people would naturally feel, and the need for China to reassure them. ‘She was actually rather impressed by him,’ Powell judged. ‘Here was this tiny figure, who exerted absolute control over 1.3 billion people. He dominated the others, who were plainly in thrall to him. Did she warm to him as a human being? No. He was a Communist and a tyrant.’157 Deng asked Mrs Thatcher for her impressions of Gorbachev from her meeting three days earlier. It reveals something of the dramatic nature of the week that she found herself discussing the potential leader of the Soviet Union with the leader of the largest Communist country in the world before she had had a chance to do the same with the President of the United States.

  After this meeting, Mrs Thatcher signed the Hong Kong Agreement in what she described as ‘a spirit of pride and of optimism’.158 The next day, she flew to sell it to the anxious but mostly welcoming people of the colony she had just agreed to hand over.

  Huge difficulties remained. The full detail flowing from the Agreement had to be worked out and the Basic Law secured. The question of nationality and British passports for Hong Kong people was extremely sensitive and would become more so whenever something went wrong in China. So was the matter of democratization. No one could really know how China, emerging under Deng from utter totalitarianism, would behave. Mrs Thatcher had not got what she had set out to attain in 1982, or anything like it. Those on the conciliatory side of the argument – notably Cradock and Howe – were therefore the more pleased. Howe regarded the Joint Declaration as the example of his relationship with Mrs Thatcher ‘at its best’,159 whereas she, he noticed, felt that ‘we could have done something better’ for Hong Kong. Charles Powell thought that she was ‘never really happy about it’.160

  Powell also recognized, however, that it was ‘a remarkable agreement given that the Chinese could just have walked into Hong Kong’, and one that would stand the test of time. According to the Hong Kong Chinese Lydia Dunn,* a member of EXCO, who dealt frequently with Mrs Thatcher,

  She was perhaps alone among the British team in understanding that Hong Kong was a human issue, not just a diplomatic one. Those in EXCO were convinced of her genuine empathy and thus quickly came to trust her. This helped to overcome the widely underlying suspicion of the so-called ‘British sell-out’.

  She had ‘instinctual sympathy’ for Hong Kong people and their dilemma, and this made a crucial difference.161

 
Just after Geoffrey Howe reached agreement in Peking at the end of July 1984, Mrs Thatcher was sent examples of the largely favourable Hong Kong press reaction. One pro-Peking paper said that ‘it took an Iron Lady to have the courage to end British colonialism’.162 Mrs Thatcher underlined this and wrote an exclamation mark beside it. The paper’s comment had been intended as a compliment, but it was not one she could cheerfully accept.

  For Mrs Thatcher, who detested Communism, never thought ill of the British Empire and felt tenderly towards all those who liked British rule, the Agreement was bound to be bitter-sweet. In her memoirs, written before the handover and after the trauma of Tiananmen Square in 1989, she devoted little space to the subject, perhaps worrying that everything might yet go wrong. But capitalist Hong Kong did not collapse, and for that she deserves part of the credit. Flushed by her victory in the Falklands, she had dared to dream that Hong Kong could remain proudly British. In this she failed, and was bound to fail. But she also dared to dream that the free, capitalist society which Britain had brought into existence could be preserved from Communism, by agreement with Communists. In this, though it may still be too early finally to judge, she partially succeeded, with important results for China’s attitude to freedom and to the outside world.

  5

  Reagan plays her false

  ‘If I were there, Margaret, I’d throw my hat in the door before I came in’

  By winning the general election of 1983, Mrs Thatcher had also won a mandate for the deployment of US cruise missiles on British soil. Unilateral nuclear disarmament had been clearly offered to the electorate by the Labour Party, and clearly defeated. The actual arrival of the missiles remained controversial. The launchers and warheads reached Britain in November. Protests, led by women, at RAF Greenham Common where some of the missiles were sited, continued, but decreased in number: ‘they had become an eccentricity,’ Mrs Thatcher told Vice-President Bush that June.1 By prevailing, Mrs Thatcher had won her only really difficult domestic Cold War battle. Her triumph – electoral, international and, in her view, moral – gave her the space to reflect. Calling to offer his congratulations, President Reagan, clearly delighted, had declared her victory ‘a shot in the arm for all of us who have a kind of solid philosophy worldwide’.2 In response Mrs Thatcher showed the way her mind was tending: ‘she believed the result would strengthen the Western alliance and might encourage the Soviet Union to show more flexibility in disarmament negotiations.’3