Newly declassified documents seen by HKFP have revealed that London decided not to warn Beijing’s top man in Hong Kong in 1985 about the risks associated with his effort to save a Hong Kong newspaper. British officials commented internally that it was a “somewhat rash” commitment to be the personal guarantor of a HK$30 million loan.
The information was revealed in a set of documents stored in the National Archives in Kew, London. The documents entitled The financial activities of Xu Jiatun, Head of New China News Agency were declassified in August.
The Hong Kong government noticed Xu had given a personal guarantee for a loan from the Chinese-backed Kincheng Bank to save the operation of the left-wing Tin Tin Daily News, one of the most prominent Chinese-language newspapers in Hong Kong at the time. New China News Agency, or Xinhua, was the de-facto Chinese official organ in Hong Kong.
The owner of the newspaper, Alan Lau, was in financial trouble as his commercial empire Millie’s Handbags and Shoes had collapsed a year earlier.
John Boyd, political advisor of Hong Kong government, asked Anthony Galsworthy of the Hong Kong Department of the Foreign and Commonwealth office in London for reaction in May 1985.
“We have no problems with Xu’s involvement unless things go wrong. If the paper folds his name is on the chit,” wrote Boyd. “In that case it is not excluded that he might try to extract himself from any proceedings (leaving aside the natural wish to protect his pocket book) by claiming immunity.”
Boyd assessed that “it seems unlikely a communist bank would round on Xu.”
But he prepared a draft informal advice to the Xinhua News Agency, for Galsworthy to comment on, saying that Xu was treated in practice as an official representative of the People’s Republic of China, but “There is, however, no legal basis whatsoever for any immunity.”
“Were the bank in question to invoke Mr Xu’s guarantee, the Hong Kong government would thus be powerless to intervene,” the draft read. “Xinhua News Agency’s representatives have always taken great care to avoid any action which might embarrass them and us. We want to keep it that way.”
In response to Hong Kong after seeking advice, Galsworthy said warning Xu and Xinhua about the move might stimulate the Chinese government to ask for formal privileges and immunities for Xinhua staff members on diplomatic passports.
“We also wonder whether we really wish, as you suggest, to point out to Xu that he is free to engage in commercial activities, although we realise that is the legal position,” he wrote.
Galsworthy also agreed that it would be highly unlikely that a communist bank would “put the head of NCNA in dock.”
“This being so we are inclined to think it may be better not to make an approach at all,” he wrote.
In Xu’s memoirs, he said Alan Lau “did not take care of the newspaper, went missing” after receiving the HK$30 million loan. Xinhua had to find a new investor for the newspaper.
Tin Tin Daily News, a racy tabloid which featured in several notable libel cases, was the first Chinese newspaper to be printed in colour in Hong Kong. It closed in September 2000.
Xu died in self-imposed exile aged 100 in the US in June.