On 19 December 1984, Prime Minister Margaret Thatcher and her Chinese counterpart Zhao Ziyang, in the presence of paramount leader Deng Xiaoping, signed the Sino-British Joint Declaration which promised that after reverting to China on 1 July 1997 Hong Kong would enjoy a high degree of autonomy under the One Country Two Systems formula in the next 50 years. The People’s Daily, the official newspaper of the Chinese authorities, subsequently published an editorial article, stressing that making this agreement was a successful milestone, because it safeguarded the interests of both Beijing and London and guaranteed the prosperity and stability of Hong Kong after the sovereignty transfer (“A major,” 1984). Nevertheless, given their constant skepticism over the Communist regime, the promises in the Declaration were unable to cease the apprehension of the Hong Kong people about the future of their hometown. Thus, some of them emigrated. The confidence of the local residents declined further after the stock market crash in October 1987.
To restore the morale of their fellows and retain its status as an international financial and commercial center after the British retreat, Stephen Cheong, a London-educated entrepreneur and lawmaker, together with a group of business elites, in April 1988, suggested that Hong Kong should stage a five-month World Expo in 1997 straddling the 1 July political handover (Leung, 1988). Since the proposed mega-event was estimated to be able to bring in an HKD 4.4 billion/USD 571.4 million economic activity, 25,000 additional jobs, and over 5.9 million overseas and mainland Chinese visitors (Ho, 1988a), the local chambers of commerce and professional associations successively expressed support to this innovative idea (“Association backs,” 1988; Daswani, 1988). The majority of the legislators and district board members also stood out backing Cheong and his compatriots (Lee, 1988; “Official report,” 1988). However, the London side did not readily give endorsement. Instead it asked the colonial government to make a judgment about this issue on its own (Quon, 1988).
Although he personally deemed that Cheong’s suggestion was interesting and encouraging (“Governor cautious,” 1988), Governor David Wilson—a moderate diplomat and senior sinologist—was reluctant to register Hong Kong’s hosting intention to the Bureau International des Expositions , the governing body of the World Expo, partly because the existing Kai Tak Airport was unable to handle the estimated over five million non-local visitors (“Kai Tak’s,” 1988) and partly because the event, which was estimated to cost HKD 3 billion/USD 390 million (“Too many,” 1988), was believed to inevitably trigger setbacks in the major development projects that had already been in the pipeline (Ho, 1988b). In view of the firm position of the executive, some Expo proponents changed their mind (“Government challenged,” 1988). On the other hand, the Beijing side also had reservations against Cheong and his fellows’ proposal due to the complexity of operating this five-month gala with the British (Leung & Lee, 1988). Eventually, this imaginative plan was rejected by the colonial authorities in October 1988 (“Government slams,” 1988).
However, after stepping in the 1990s, Hong Kong’s application for holding their 1997 Annual Meetings was submitted to the WBG and the IMF with the support of both Beijing and London. Macao, a seaside casino city that would be returned to China in December 1999, also activated the bid to host the 2005 EAG by the blessings of Beijing and Lisbon, despite the fact that it rarely participated in international sporting affairs during the over 400-year Portuguese rule. Their subsequent success in being awarded the hosting rights indicated that the curtains had opened for the two cities to stage mega-events in the post-handover era.
1.1 Hong Kong’s Application for 1997 WBG and IMF Annual Meetings
In the 1989 Policy Address, David Wilson unveiled his administration’s plan to build an HKD 127 billion/USD 16.5 billion airport in Chak Lap Kok. Since the entire construction was scheduled to be completed in the first half of 1997, the colonial government, under the supervision of London, initially decided not to consult Beijing, but instead to process the project solely by itself. This decision later was revised because the local banks and financial companies bluntly stated that without China’s involvement as the loan guarantor, their money would not be lent to the government for the construction (Chung, 2001, pp. 182–183).
The Chinese government, despite demanding Hong Kong to have a new airport, was unwilling to accept the proposed project of the colonial authorities due to the apprehension about the city’s financial reserves in 1997. In view of this, the London side realized that if no significant concession was made, the Chinese would not change their mind. Former British Ambassador to China Percy Cradock, on behalf of the British government, subsequently initiated the Memorandum of Understanding Concerning the Construction of a New Airport in Hong Kong and Related Questions—which particularly stated that the colonial authorities would leave at least HKD 25 billion/USD 3.2 billion to the Special Administrative Region (SAR) government—with his Chinese counterparts. He also pledged that the newly incumbent Prime Minister John Major would sign the memorandum with Chinese Premier Li Peng at Beijing in September 1991 (Cradock, 1999, pp. 237–243; Lu & Qian, 2009, pp. 73–79).
Major fell into a dilemma. On the one hand, he was supposed to continue to boycott China together with the leaders of the other Western states for the sake of penalizing the brutality of the communist regime over the people in summer 1989. On the other hand, he understood that visiting Beijing was the key to not only settle the new airport issue, but also facilitate the long-term prosperity of Hong Kong and defend the interests of Britain. Eventually, the host of the Number 10 chose the latter (Major, 1999, p. 505).
The interests here were not only about Britain’s monetary gain, but also about its image and reputation. In fact, since the Tiananmen incident caused the Hong Kong people’s collective anxiety over the handover, Margaret Thatcher and her cabinet, in the consideration of moral responsibility, granted full British passports to 50,000 local households (Cradock, 1999, pp. 233–236; Thatcher, 2011, pp. 494–495). Nevertheless, they still hoped the members of these households and the other Hong Kong people could stay at their hometown with confidence during the transition period and even after the handover, so that the retreat of Britain on 30 June 1997 could be with honor, glory, and respect. To this end, the British government determined to not only create more job opportunities in the colony and enhance its international competitiveness, but also consolidate the city’s legal foundation for protection of human rights and push forward its democratization. Therefore, London, aside from signing the Memorandum for the building of the new airport, led the colonial government to introduce a bill of rights and negotiated with Beijing for giving more democracy to the local citizens (Tsang, 2004, pp. 251–252). Through secret diplomacy, the Chinese government agreed that of the total 60 members of the Legislative Council (LegCo)—the lawmaking body of Hong Kong, 18 could be from direct election in 1991, 20 in 1997, 24 in 1999, and 30 in 2003. It also allowed the lawmakers elected in 1995 to sit through the sovereignty transfer and automatically become the members of the first SAR LegCo in 1997, despite the fact that the agreement regarding the number of the directly elected seats in 1995 remained unsettled (Cradock, 1999, p. 232; Loh, 2011, p. 203). In September 1991, the candidates who demanded to democratize Hong Kong and China won a landslide victory in the LegCo direct election.
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