Margaret Thatcher

Peter Wu

10 April 2013

Do I remember her? You bet I do. Every Hongker of our vintage will remember her, for causing the most momentous political event (kicking off the negotiations for the return of HK to China) and the most disastrous financial event (the free-falling of the HK dollars) in HK’s history.

After a disastrous and explosive-laden meeting with Deng Xiaoping, at which Deng pointedly insulted her by calling called her a ‘stinky woman’, she left the meeting in a huff that she fell off the steps of the Great Hall of the People. News was already getting out about that disastrous meeting and that there was no a chance in hell that Britain was allowed to stay in HK after 1997. When she finally fronted a press conference in HK stating the no decision had been reached about the future of HK, the HK dollars immediately went into a free fall, losing as much as 5% of its value against the US dollar in a day, for possibly a couple of weeks on end.

Seeing this, the whole of HK, which was already jittery, went into open panic. Like sheep in a herd, every Wong, Chan, Lee, Choi, Tham rushed to buy US dollars (in notes, not drafts or US dollar accounts). When that went dry (no bank has that of kind of reserve in US dollar notes to meet such panicky buying), it fuelled further naked panic. Supermarket shelves were stripped bare of non-perishables, queues formed outside bigger banks first then smaller banks, and multi-national companies set up emergency plans to evacuate their high ranking personnel at short notice.

Anyway, the currency disaster was averted with an ingenious plan to peg the HK dollar against the US on a fixed rate, at HK$7.80 vs the US. This has stayed at this level ever since.

In the recent release of some of her personal documents, her meeting with Deng Xiaoping was very revealing. Deng’s stance was hard-nosed and totally uncompromising. It was the return of HK to China by 1997, or earlier if civil unrest did break out in HK at which event he would send the PLA troops down to forcibly take over HK. It was not so much a dialogue as a lecture by Deng to the Iron Lady. It was unsure whether the insult of ‘stinky woman’ was ever translated there and then but there was no mistaking it was a lecture, and a stern one at that. No wonder she was so pissed off when she left the meeting and took a stumble at the steps.

In retrospect, I think she totally misjudged the mood of Deng (she should have shot some of the Mandarins from the White Hall for this), his total conviction to right historical wrongs and his determination to purge the ghost of a major historical humiliation. It was also totally na鴳e for the Hongkers to expect the lease of Kowloon and the NT to be renewed by another 99 years, and for the Iron Lady to come back from Beijing with a new treaty in her hand after a meeting lasting only several hours.