Description
This paper presents a `primacy of domestic politics’ interpretation of the Thatcher government’s handling of the negotiations over the Sino-British Joint Declaration. It draws on recently released archival material to suggest that the Thatcher government was driven primarily by concerns over the stability of sterling in its negotiations with the Chinese government over the return of Hong Kong. Whilst most of the existing literature prioritises sovereignty as the main issue dominating the UK side, this paper will argue that from 1983 onwards the UK negotiators were primarily focused on reaching an agreement to safeguard Hong Kong as a key financial centre thereby avoiding an international crisis which would have had serious consequences for the stability of sterling and for Thatcher’s programme of domestic economic reform in particular financial liberalisation and deregulation. The paper draws out the theoretical implications of relating the domestic pressures on sterling in the early 1980s to the foreign policy objective of securing the Sino-British Joint Declaration.
