Let’s dispel any doubts now over Hong Kong’s post-2047 future

Hong Kong could be in for another bout of “what will happen to us in …”, only with 2047 replacing 1997. I say this after attending a farewell presentation by activist investor David Webb last week.

For many years, Webb has worked on a pro bono basis to improve public knowledge of business issues. Towards the end of his fireside chat at the Foreign Correspondents’ Club, Webb asked which legal system would apply in Hong Kong after 2047 and whether our law students should continue to study the existing system or start to become proficient in mainland law. He referred in particular to contract law and land leases.

My immediate reaction was: let’s please not go through all this again. Half a century ago, I was an alarmist. Now I urge everyone to keep calm.

When I first arrived in Hong Kong in the early 1970s, almost nobody expressed concern about 1997. Received wisdom then was that the date was irrelevant as Beijing had expressly disowned all the unequal treaties signed with foreign powers in the 19th century. China was ignoring the deadline, so it was safe for Hongkongers to do the same.

I was never really convinced by that argument, for two reasons. The first concerned the relevant treaties. Britain was sticking to the terms of the two which gave it control over Hong Kong Island and urban Kowloon in perpetuity. It followed that, for consistency’s sake, it had to abide by the terms of the 1898 lease of the New Territories. The British would have to offer it up when the 99-year lease expired.

The second reason concerned borrowing for property purchases. Hong Kong was moving towards 20-year mortgages, which simply did not work for properties north of Boundary Street (which used to mark the border between the colony of Hong Kong and the New Territories). Bank managers are by nature cautious, and I couldn’t see them making big loans to buy on land where ultimate control would shortly be in question. I urged anyone who would listen to address the issue, but there were few takers.