In September 1982, Margaret Thatcher, fresh from her victory in the Falklands war, visited Beijing.1 By this time, it was clear to British diplomats that China intended to reclaim Hong Kong in 1997. Taiwan was no longer to be seen as the model which Hong Kong would follow. Instead, Hong Kong would provide the model for reunification with Taiwan. Thatcher states in her memoirs that Britain’s negotiating position was founded on ‘Britain’s sovereign claim to at least a part of the territory’, but that she ‘could not ultimately rely on this as a means of ensuring the future prosperity and security of the Colony’. Britain’s aim was ‘to exchange sovereignty over the island of Hong Kong in return for continued British administration of the entire Colony well into the future.’2