1967 as the Turning Point in Hong Kong-British-PRC Economic Relations

The present chapter will analyse a crucial moment in the special relationship developed by Britain, Hong Kong and Maoist China during the Cold War. The year 1967 can be considered a landmark for two very relevant events: the highly politicized riots which raged the Colony from spring to autumn, and the sterling devaluation which happened in late November. Both events marked the beginning of a new consciousness in the British government of Hong Kong and its people as a modern entity that wanted to be treated fairly. Many scholars have seen in the riots of 1966 and 1967 a potent trigger for the long overdue social and political reforms which were eventually enacted in Hong Kong in the 1970s. The reaction of the business community at the 1967 devaluation represented the first independent stance of the Colony, which would eventually lead to its detachment from the Sterling Area under new political circumstances in early 1970s. Although the riots and the devaluation are completely independent events, the chapter will argue that there is a link which ties the responses devised by the London and the Colonial government to handle local reactions. Particularly, the chapter will highlight the relevance of economic interest of the three players as opposed to the need of political control and to the conservance of outdated metropolis-colony relations.