After 5th round, some clearer signs in Hong Kong talks

By , Staff writer of The Christian Science Monitor

A capitalist Hong Kong within a communist China - this is what Peking seems to be promising Hong Kong's 5.2 million people as it talks with Britain over the territory's future.

Five rounds of talks between British and Chinese negotiators have been held in strict secrecy. A sixth round will take place here Nov. 14 and 15.

The last round, on Oct. 19 and 20 was characterized as ''useful and constructive'' by both sides. The Hong Kong dollar, which nosedived to 9.50 to the US dollar when this description of the talks was missing from the September round, held firm at its recently pegged price of 7.80 to the US dollar.

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Both the British and the Chinese are holding their cards close to their chest. The chief negotiators in the just-concluded round of talks were Sir Edward Youde, governor of Hong Kong, and Yao Guang, Chinese vice-foreign minister.

The most concrete tidbit to emerge from the latest round was that the British have submitted ''new ideas,'' and that the atmosphere was friendly. British Prime Minister Margaret Thatcher is reported to have sent a letter to the Chinese leadership recently, but its contents remain a closely guarded secret.

Nevertheless a number of general propositions are clear. The Chinese are insisting on recovering sovereignty over all of Hong Kong when the British lease over most of the territory expires in 1997. They also insist that sovereignty cannot be separated from administration - that they will not allow British law and administration to continue de facto for say 20 or 30 years.

At the same time, Peking says it is committed to the prosperity and stability of Hong Kong. It also says that it will make it a ''special administrative region'' with far greater powers of self-rule than other parts of China and that Hong Kong's present capitalistic social and economic system may continue for a long time.

Sovereignty is an emotive word to the Chinese, who never tire of recalling that Britain originally seized Hong Kong Island as a result of the notorious Opium War in 1841, and that the territory was subsequently expanded as a result of two further ''unequal treaties'' signed in 1860 and 1898.

Legally, there is a difference between Hong Kong Island and the tip of Kowloon Peninsula, which the Chinese ceded ''in perpetuity'' to the British in Queen Victoria's heyday, and the rest of the territory, which the Chinese leased to Britain for 99 years in 1898.

But the British know that Hong Kong Island is not viable without its surrounding territories. Even now the territory as a whole gets much of its drinking water from China.

The question really is how to guarantee Hong Kong the ''prosperity and stability'' and the unchanged social and economic systems that Peking promises.

Hong Kong is the world's third-largest financial center - outranked only by New York and London. Its prosperity and stability depend on that most fragile of all perceptions - investor confidence.

Beyond Hong Kong, for China, lies the even greater prize of Taiwan. A capitalist Hong Kong seen to be working within a communist China could be a powerful incentive for Taiwan to consider peaceful reunification with the mainland.

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