The fury of a dragon scorned: Hong Kong is the one battle an uneasy China cannot afford to lose, says Raymond Whitaker

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The Independent Online
Peking in mid-October: China's 88-year-old supreme leader, Deng Xiaoping, had reason to feel pleased with himself. The 14th Communist Party Congress had just ended in a satisfactory display of unity; Mr Deng's 'reform and opening up' economic policies had at last been given unequivocal party endorsement. While most of the world was in recession, China's economy was booming and a return to membership of Gatt, the General Agreement on Tariffs and Trade, was being negotiated. Political dissent was at a low ebb and Emperor Akihito of Japan was about to arrive on a state visit. Despite the disappearance of Communism elsewhere, China's importance in the world was being recognised.

But the fragility of this self-image has since been exposed. No sooner was the congress over than the noisy new Governor of Hong Kong, Chris Patten, came to Peking for his first visit. China had issued routine denunciations after he announced his democracy proposals earlier in October, but his talks in the capital made it clear to the leadership that something more was needed.

Mr Deng is reported to have said: 'When they break the rules in the first step, we should remind them; when they break the rules in the second step, we should give them some warnings; and when they break the rules in the third step, we should start something new, and may tell them to go home.' As far as Peking is concerned, the dispute now appears to be well into the second stage.

To understand China's savage reaction to what Mr Patten insists are 'modest proposals' one should look at what else has disturbed Mr Deng's equanimity. As Mr Patten and Emperor Akihito came and went, it was becoming clear that Bill Clinton was going to win the US election. Even though China's good friend George Bush had angered Peking by selling 150 F-16 fighters to Taiwan, Peking still wanted him to beat a man who was threatening to link trade concessions to human rights. Mr Clinton has diluted his position since the election, but he remains unpredictable.

Relations with the US have been deteriorating for some time over such issues as nuclear proliferation, Chinese arms sales and Peking's reluctance to open its markets to American goods. But the latest action of the outgoing president is in a different category. By sending his chief trade negotiator, Carla Hills, to Taiwan, Mr Bush has broken an embargo that has existed since Jimmy Carter's day. Like Hong Kong and Macau, Taiwan is seen by Peking as part of the motherland which must be reunited.

Taiwan's purchase of F-16s has been followed by a contract with France to buy 60 Mirage 2000-5 fighters, although to save Peking's face, both sides have refused to confirm the deal. Taiwan's relations with other European countries have also moved forward - no sooner had Germany broken its post-Tiananmen quarantine by sending its foreign minister to Peking, its economics minister was visiting Taipei. All this attention to Taiwan comes as the island is preparing to hold its freest election since Chiang Kai-shek and his Kuomintang nationalists took over in 1949.

Peking has warned that if this results in any declaration that Taiwan is not part of China, blood will be shed. But this threat should be seen in a wider context: Mr Deng and his colleagues see a Western conspiracy to destabilise China through machinations at the periphery. This explains the accusations that Mr Patten is seeking independence, or semi-independence, for Hong Kong.

Recent international support for the Governor - from Canada, Australia, the US and Japan, among others - simply reinforces the view that he is an agent of disruption whose potential for mischief increases the more southern China's economy becomes intertwined with Hong Kong's. China, as some specialists argue, sees Hong Kong as a beachhead.

If China feels beleaguered or encircled, however, there is little it can do. Its huge trade surplus with the US, expected to exceed dollars 20bn ( pounds 13bn) this year, underpins the economic growth necessary to keep the Communist Party in power. The collapse of Communism in the former Soviet Union has not only heightened China's sense of isolation but has also removed its value as a strategic counterweight to Moscow, leaving it little leverage over other Western powers.

Britain is another matter. Apart from its fury over what it sees as a sudden and destabilising change of policy in Hong Kong, China appears to be exorcising slights to its national pride, which date back to the 19th century. For Peking, Hong Kong is one battle it can and must win.

(Photograph omitted)