The Empire, long divided, must unite. History comes to a .
At the same time, Deng's "Southern Tour" triggered investment in Guangdong, and the economies of Hong Kong, with six million people, and Guangdong, with ninety million, became intertwined.
Hong Kong, which had been flourishing in the Eighties, developed a sort of super-boom, especially in real estate.
I have never seen this set out in print, and what follows is my own theory, but on the strength of a question raised with the National Peoples' Congress by Li and Fung, I think I am on the right track here:
Hong Kong, as you know, has very low personal and corporate taxes.
China on the other hand has a normal sort of corporation tax rate - 35% - more than twice Hong Kong's, and VAT, which Hong Kong does not have.
Let us suppose we set up a shirt factory in Shenzhen. We export our shirts, collecting the VAT rebate on exports as we go, to our own subsidiary in Hong Kong, at a low price, on which we pay Chinese corporation tax.
Our Hong Kong subsidiary re-exports them at market price, paying the low Hong Kong corporation tax on the profits, and we then re-inject some of those profits into our factory in Shenzhen as foreign direct investment, collecting the Chinese FDI tax rebate as we go.
The rest of our profit sits in our HK subsidiary, outside the Chinese tax net, in hard currency, so we use it to buy real estate...
The strain on family life can be imagined.
Lower down the social scale there were also rather similar things going on. A lot of factory managers and accountants found themselves working in Guangdong, getting back to Hong Kong at the weekend. Very often these men found an agreeable companion from Monday to Friday in the shape of a Mainland girl, and an awful lot of them started second families...
There was a new source of employment for working class men; as truck drivers, bringing goods from China into Hong Kong for re-export. They also very often found agreeable female companionship in China...
In Hong Kong there was a new social phenomenon - the "sandwich class" - couples who were in Government housing but whose income had risen to the point where they no longer qualified for it, yet were unable to afford a mortgage in the private sector.
A lot of people speculated in apartments by "buying off plan" in new apartment blocks, putting down the deposit and hoping to sell before the balance came due.
Often, this worked...
As the first of July 1997 approached, almost every professional body in Hong Kong -teachers, accountants, lawyers, engineers, nurses - amended its requirements for membership. The changes were aimed at one thing - keeping Mainlanders out.
The relationship between Hong Kong people and Mainlanders is not always wonderfully warm. Mainlanders and Taiwanese often get along much better together. Culturally, their history is closer in several ways.
But Hong Kong's citizens were putting in place a self defence policy; one that has proved very effective indeed. Hong Kong was making itself both indispensable to China and incomprehensible to China.
China's companies have come to depend ever more heavily on Hong Kong for finance and trading, whilst Hong Kong has succeeded in convincing the Mainland that any interference would trigger a collapse of confidence and consequent disaster.
In particular, I think that social mobility in Hong Kong, an intensely meritocratic place, has actually decreased.
Hong Kong's trade union movement is divided in two along the usual fault line; on the one side the pro-Beijing trades unions, often still run by the organisers of the '67 riots, and on the other hand the "independent" trades unions, with a social democratic agenda.
These unions are commonly accused by the pro-Beijing unions of being pro-KMT, but that is a bit quaint, given the rapprochement over Taiwan between the CCP and the KMT, with the CCP seeing the DPP as a far bigger danger.
The consequence of this split has been to greatly weaken the bargaining power of the Hong Kong working man, and this has contributed to the widening of the wealth gap.
I was watching the ceremony on television in Beijing and I phoned an old friend in Hong Kong who, over ten years of working together, had never failed to pull my leg about my impossibly reactionary, imperialist, male chauvinist and racist approach to life.
"Well", I said, continuing the vein of a decade's mutual joshing, - "You've got your wish - you are free of us British at last!"
She burst into tears. "You've got it all wrong!" she said, "As usual!"