China feels Thatcher's handbag ives China a warning

`Never be afraid of opposition ... let public opposition come out'

As she herself told her hosts, she was never "famous for remaining silent". In that respect, she remained true to form.

A speech by Baroness Thatcher in Peking yesterday was punctuated by just the sort of comments China does not expect to hear from visiting former world premiers: "dismay" at recent harsh sentences for dissidents, warnings to China not to block Internet access, a reference to Qin dynasty book- burning, and a prediction that economic reform was "bound to lead in time to change in the way in which China is governed".

In her familiar bright blue suit and pearls, she mused: "It is very interesting that the same Chinese people in mainland China ... produce a totally different standard of living" from that of Hong Kong. The answer, she added, was "the system of government under which you live". Visiting diplomats and business leaders do not display such forthrightness when speaking in China, fearful of losing contracts as a result.

The former British prime minister declared that British rule deserved the credit for Hong Kong's prosperity but that "the success of the transition is now in China's hands". She warned Chinese leaders that the return of Hong Kong would "have the most direct and immediate bearing on China's reputation in the world".

Lady Thatcher said she intends to be in Hong Kong on 30 June next year, when sovereignty reverts to China, "to witness the undertakings so solemnly given by China ... being put into practice".

It was, however, as one of the signatories to the 1984 Sino-British Joint Declaration on the return of Hong Kong that she wanted to make her point. Asked by a Hong Kong member of the audience what "timebomb" Britain had left to disrupt the territory after 1997, she retorted: "It will not have been Britain that created that time-bomb. I don't believe there is one. And you should not look or try to find one."

Lady Thatcher presented an alternative view. "Hong Kong has built its own way of life and a level of prosperity [that] it would never have had except for being under British rule with sound administration, a rule of law, a free enterprise economy, and private property."

On the question of whether political liberty and rule of law in Hong Kong will survive 1997, Lady Thatcher said: "China will need to show great understanding for Hong Kong's traditions, above all its tradition of free speech". She regretted Peking's decision to scrap the elected Legislative Council (Legco), and hoped China "will take the earliest steps to organise free and fair elections".

On China's role in the wider world, she compliments to the country's history and culture. But she referred to "a consistent thread of guarding against outside intrusion, whether it be trade or ideas or people".

In characteristic fashion, she issued her own advice to China's leaders. "Never be afraid of public opposition ... Let public opposition come out."