Economic Statecraft in Anglo-Chinese Relations: Recalling the Hong Kong Airport Negotiations

This analysis demonstrates the use of economic statecraft in Anglo-Chinese negotiations over a new airport for Hong Kong. Leading to the signing of a memorandum of understanding in 1991, Chinese negotiators used bargaining leverage to withhold support for the airport and related projects to obtain British agreement for 'consultation' over major projects that straddled the transfer of sovereignty in 1997. Subsequent British flexibility on the timing of the project's completion meant that Chinese attempts to use leverage on the airport in further talks after 1992 were somewhat less effective. Nevertheless, wider difficulties in the bilateral relationship and the legacy of distrust slowed detailed negotiations over airport financing, with the final pieces only put in place in 1995. Based on the perceptions of negotiators on both sides, there existed a tendency for each side to see their negotiating position as reasonable and justified, and the other as duplicitous or unreliable.