Many have forgotten the late prime minister's role in momentous event

Most obituaries and memorials of Margaret Thatcher, who died aged 87 on April 8, failed to mention that she was British prime minister when China negotiated and then signed the joint declaration regarding Hong Kong. This agreement with Britain decided Hong Kong's future, and underpins its success today.

The historians of the Thatcher years have tended to pass over Hong Kong as an issue that never fully engaged her, something that she was content to leave to her diplomats. In fact, Thatcher was intensely interested in Hong Kong, discussed its various aspects at length, and during the negotiations with China, made the key decisions on the British side. The position of Hong Kong as a highly visible and successful part of China will, one day, make Thatcher's role in its peaceful handover one of her more important legacies.

Thatcher's status as a highly significant politician in Britain and on the world stage is probably the reason why the important role she played in Hong Kong's future has been overlooked. At home in Britain she was the most dominant and divisive political figure since William Ewart Gladstone in the 1800s.

Before Thatcher became prime minister in 1979, the norms of British political life were collective effort, full employment and a managed economy. Under her leadership, they were replaced in the 1980s with the ideas of "me and mine", freedom of choice and freedom of the individual. These ideas, which she fostered in the public imagination, resonated first through Britain, then the world, reaching eastern Europe in the 1990s and, more recently, China.

Thatcher became fascinated by politics shortly after she left Oxford University, where she studied chemistry under a future Nobel Prize winner. After studying to become a lawyer, she was elected as a member of Britain's parliament in 1959 to represent Finchley, a suburb of London, where she stayed until she entered the House of Lords in 1992.

In 1961 she became a junior minister, and then minister of education in 1970. After her party, the Conservatives, was defeated and driven from office in 1974, she stood in 1976 as a Conservative party leadership candidate. She was an outsider, but she succeeded in the election by distancing herself from the former prime minister Edward Heath and his failed policies, although she had been a minister in his government. In 1979 she led her party back to government by winning the general election of that year, and became the Western world's first woman leader.

During the 1970s Britain's economy, marked by battles between workers and managers, had gone from bad to worse. In 1976 Britain marked its dramatic decline as a major industrial and economic force by turning to the International Monetary Fund in Washington for financial support. While this was going on, Thatcher allied herself with people in her party who, under the influence of the Austrian free-market economist Friedrich Hayek, were thinking in a new way about economics and social policy. When she became prime minister in 1979, she was prepared to think radically and differently to her predecessors.

Inspired by Hayek's liberal ideas and his book The Road to Serfdom, her instinct was to stand up for the individual. She gave expression to her beliefs by supporting the policy of selling government interests in state-owned British companies: first in electronics, then from 1984 in utilities like gas, telecoms and electricity. But it was a strange paradox, given this, that Britain became more centralized and the office of prime minister became more powerful during her time in office.

Caspar Weinberger, secretary of defense in US president Ronald Reagan's first term of office, was an Anglophile. The US support for the British recapture of the Falkland Islands in 1982 was an essential part of Britain's military success. From this sprang the strong personal relationship between Thatcher and Reagan, which inspired Reagan to increase US defense spending up to the point that the Soviet Union, under president Mikhail Gorbachev, was forced to open discussions for weapons reductions, and to introduce political changes. Her relationship with Reagan raised Thatcher from being an influential British figure to a role of importance on the world stage. Her ideas about individual choice and freedom drove an economic and social revolution that still reverberates worldwide.

Britain had acquired Hong Kong from China in stages. First, Hong Kong Island in 1842; then, in 1860, the tip of Kowloon and Stonecutters' Island; and finally in 1898 the rest of the New Territories up to the border with the Chinese mainland, under a 99-year lease. After 1949, Zhou Enlai made it clear to Britain that Hong Kong was, and always had been, Chinese and that one day the Chinese would like it back. By the early 1980s, the approaching end of the 99-year lease in 1997 was impacting on arrangements within Hong Kong that depended on a long-term view, such as land tenure. Both Britain and China had considerable economic interests in Hong Kong, and they recognized that a long-term arrangement needed to be made.

When in 1982 the discussions between China and Britain over Hong Kong's future passed beyond polite inquiry to serious discussion, her initial approach was hostile. She admitted to her officials that the lease on the New Territories would expire in 1997. But was it possible, she asked them, for Britain to remain on Hong Kong Island and the tip of Kowloon, supported by its army and navy, in the face of a hostile China? Could Britain share control of Hong Kong with China after 1997?

All the possible alternatives to a full handover of power to China were explored, before the discussions with China began in September 1982 in the Great Hall of the People in Beijing. At the meeting, the Chinese made it clear that while they hoped to do a deal with Britain over Hong Kong, if not, sovereignty came before economics, and China was determined to reimpose Chinese sovereignty on Hong Kong.

The meeting the next day with Deng Xiaoping made the Chinese position even clearer. Thatcher was impressed with Deng's strong personality, as well she might be. Her meeting with him started to impress on her mind the strength of determination in Beijing regarding Chinese sovereignty over Hong Kong. Although the British negotiators continued to press the case for British control until October 1983, she began to realize that it would simply not be possible for Britain to exercise any control over Hong Kong after 1997.

Against a background of economic volatility and some unrest in Hong Kong, it took two years of hard negotiating for the two sides to reach agreement over the handover.

Given that both sides started from firmly opposed positions, against a historical background that could only remind the Chinese of humiliation and defeat at a recent time in their long history, the joint declaration, signed in Beijing in December 1984, was a triumph of international diplomacy. The then secretary-general of the United Nations Javier Perez de Cuellar described the outcome as "one of the most outstanding examples of effective quiet diplomacy in contemporary international relations".

Today, Hong Kong has confounded the pessimistic forecasters to become one of the world's most prosperous and stable regions. Thatcher should take her share of the credit for that result. The joint declaration of 1984 will eventually be seen as one of her most important and enduring achievements.

The author is a visiting professor at Guanghua School of Management, Peking University. The views do not necessarily reflect those of China Daily.

(China Daily 05/10/2013 page11)