Defense and Acquiescence: Alexander Grantham, Hong Kong, and China

Hong Kong’s Governor Alexander Grantham in 1958: The Chinese “know they will eventually get [Hong Kong] back”

On July 1, 2017, the city of Hong Kong will mount extensive ceremonies marking 20 years since it reverted to Chinese rule in 1997.

That Hong Kong remained under British administration until this date was something of a historical anomaly and a reflection of the special circumstances of the Cold War. The British seized Hong Kong Island in 1841, which China ceded to them by treaty in 1842, followed by a perpetual lease of the Kowloon Peninsula (part of the mainland) in 1860. For security reasons, under the second Convention of Peking signed with China in 1898, the British augmented these possessions with a 99-year lease of the hinterland of the New Territories, plus 200 additional islands, which between them constituted over 90-percent of Hong Kong’s land area. From 1941 to 1945, during World War II, all these territories were under Japanese occupation.

In August 1945, overriding strong objections from Chinese Nationalist leader Chiang Kai-shek, British forces retook Hong Kong from the Japanese and re-established British administration in the territory. In the subsequent four years, civil war between the Nationalist Government and Chinese Communist forces led by Mao Zedong ravaged China. During this period, the British reached a tentative agreement with Chinese Communist leaders, including Mao and Qiao Guanhua (the top Communist representative in Hong Kong and a future Chinese foreign minister), that in the event the Communists won control of China, for the indefinite future they would leave Hong Kong under British rule.

This is indeed what happened. In October 1949, Communist Chinese troops stopped when they reached the border with Hong Kong.[i] And there—despite occasional clashes over the years—they would remain until July 1, 1997, watched by and watching their British opposite numbers.

Hong Kong in the Grantham Years, 1947-1957

Because the arrangement worked, it is perhaps easy to forget just how extraordinary this situation really was. Despite the ostensibly accommodating Communist attitude in 1949, prospects for the continuance of British colonial administration in determinedly capitalist Hong Kong were decidedly precarious. For almost 50 years, it would survive on what was ultimately the grace and favor of the mainland government. The latter did not even need to use military force to take Hong Kong. At any time the People’s Republic of China had the option of cutting off supplies of food and—by the early 1960s—water, or flooding the territory with would-be migrants, to make the British position there untenable. This never happened.

Much of the credit for making these jury-rigged, ad hoc arrangements work came down to the policies of one British colonial civil servant: Sir Alexander Grantham. Governor of Hong Kong for a crucial decade, from July 1947 to December 1957, Grantham was probably the one single British official most responsible for setting the territory’s Cold War guidelines.

Grantham was something of an old China hand, who already knew Hong Kong well. He spent part of his childhood in Tianjin, where his father practiced law. After his father’s death in World War I, Grantham’s mother remarried a Norwegian who had served in the Chinese Maritime Customs Service and advised China’s post-1911 president, Yuan Shikai. The couple and their son soon after settled in Beijing. On joining the British Colonial Service in 1922, Grantham served 13 years in Hong Kong, until 1935. Following stints as colonial secretary in Bermuda, Jamaica, and Nigeria, and governor in Fiji, he returned to Hong Kong in 1947.[ii]

Grantham had to manage and set the ground rules for a British relationship with China that would allow Hong Kong’s special position to remain undisturbed. He did so under rather difficult circumstances. Hong Kong had to deal with a massive influx of refugees from China, and also with major economic problems, the product in part of US insistence on imposing stringent embargoes on trade with the mainland after China intervened in the Korean War in late 1950. During that conflict, British troops actually fought Chinese forces on the Korean Peninsula.

In addition, the United States sought to use its consulate in Hong Kong as a base for collecting intelligence on the People’s Republic and mounting propaganda offensives and, on occasion, covert operations against the mainland. Meanwhile, at least some Nationalist refugees attempted—with encouragement from the Republic of China on Taiwan—to continue the Chinese Civil War within Hong Kong’s borders by mounting assaults on local Communist supporters. Throughout his decade as governor, Grantham was performing a complex balancing act, holding the ring between opposing forces and requiring that they coexist in some kind of basic harmony. He did so sufficiently well that, at the request of the Hong Kong community, his initial five-year term was twice extended, to just over ten years in all.

Going native is an occupational tendency of imperial proconsuls. As often as not, from the 1950s onward, governors of Hong Kong and their top civil servants tended—sometimes successfully, sometimes not—to represent and speak for their colony’s interests rather than those of metropolitan government in London. This was largely true of Grantham. During the 1950s, the Hong Kong government won itself increasing financial autonomy from London, in terms of setting budgets and managing its own affairs.

Grantham also demonstrated considerable skill in limiting the amount of funds the Hong Kong government handed over to the British Treasury as a contribution to the expenses of maintaining British military forces in Hong Kong.[iii] In 1957, Grantham successfully blocked an attempt by the Department of Defence to close all British naval facilities in Hong Kong, something he feared would be highly detrimental to local morale.[iv]

Internally, Grantham was also a pioneering governor. From 1953 onward, following a disastrous fire in the Shek Kip Mei hillside squatter shantytown that left 53,000 mostly refugee immigrant settlers homeless, Grantham instituted a major public housing program that provided basic but much-needed accommodation (300 square feet on average) for Hong Kong’s expanding population. Not so bad a record for a British colonial administrator whose background included Wellington College, Sandhurst, Pembroke College, Cambridge, the Inner Temple, and the 18th Hussars in World War I.

“The New China is [a] Fact of Life Which the West Will Have to Accept”

On at least three occasions during and just after his tenure of office, Grantham reflected reasonably frankly on the challenges of his job and his views on China. He did so to an exclusive American audience, the Council on Foreign Relations, with the blessing of the British Information Service in New York, which helped with the arrangements. Records of these occasions are now accessible through the Council on Foreign Relations Records held by Princeton University’s Mudd Manuscript Library.

In the 1950s, when the entire subject of China became extremely politically sensitive in the United States, with diplomats and academics who were considered pro-communist liable to face major career difficulties, the Council on Foreign Relations (CFR) in New York became one of the few remaining venues where China policy could be discussed without fear of adverse consequences. The elite CFR insisted that all its meetings be conducted in conditions of strict confidentiality, under “Chatham House rules,” and disciplined any member who leaked information on its deliberations. George S. Franklin, its executive director, assured Grantham that their meetings were “entirely off-the-record, and in over thirty years we have not yet had a leak.”[v]

Speaking at the CFR gave Grantham the opportunity to explain British policies on Hong Kong—to some of which, including Britain’s recognition of and continued commercial relations with communist China, many Americans were unsympathetic—to a well-connected audience of US officials, businessmen, media figures, and policy intellectuals.  

1954: “China in Chinese Eyes is Now Something to be Reckoned With”

Grantham spoke three times to the Council: in September 1954, September 1956, and April 1958. On the first occasion, a dinner meeting attended by more than 80 CFR members, Grantham sought to explain the “vital importance” of Hong Kong itself to listeners whom he suspected might not all be in agreement with him. Grantham explained to his audience that Hong Kong was one of the few places where Communist China and the ”free world” encountered each other, something he characterized as being “of the utmost importance.” It was not just a China watching station and listening post but also “a living example for the Chinese of a free life,” a lesson disseminated throughout South China and beyond:

In Hong Kong, Chinese can say what they like and do pretty much what they like without being interfered with by the police.

Five thousand people entered and left Hong Kong every day, he said, many of them Chinese. Hong Kong was therefore highly significant “in disseminating information throughout South China about what it is like to live in a free society.”

Speaking at a time when Britain was hoping to win a US defense commitment to Hong Kong, Grantham warned that, though some considered Hong Kong “expendable,” abandoning the territory and its two and one-half million people would send the message throughout Southeast Asia that the West would not stand up to communism in Asia. Seeking to counter those who claimed that Hong Kong was militarily indefensible, Grantham contended that, since “British and Americans now have full control of the surrounding sea and air,” this was no longer the case. Although the attitude of the People’s Republic to Hong Kong was one of “cold hostility,” Britain had been able to crack down on communist agitators who “acted rashly” in the colony, especially those who fomented labor disputes. But given that China could at any time cut off food supplies to Hong Kong, Britain sought neither to “appease” nor to “provoke” China unnecessarily in the territory.

Highlighting inherent nationalist sentiment, Grantham contended that Hong Kong people took some pride in the fact that mainland China was “now something to be reckoned with.” On the whole, middle-aged and older people in Hong Kong tended to dislike the new Chinese regime, while the young had greater admiration for it. Indeed, “[t]he exodus of Chinese from Hong Kong back to the mainland is on the increase, with a great number of Chinese students returning to China for higher education.”

Even so, the governor believed that most Chinese in Hong Kong were fundamentally willing to accept British rule, with local businessmen unhappy over recent mainland purges of business and many workers resenting job losses caused by Communist-inspired strikes and riots. For the Hong Kong government, “retain[ing] the confidence of the people under their control” entailed striking a careful balance:

If the Government appeased the mainland government the Chinese in Hong Kong would think the British were on the run. If the British Government were to provoke unnecessarily the mainland Chinese, all sorts of difficulties would be created for the colony. After all, the Chinese Communists can at any time they so desire shut off most of Hong Kong’s food supply. In line with this policy the Hong Kong administration refused to locate a BBC propaganda station at Hong Kong, because if the communists want to retaliate against Britain and the United States one of the few places at which they can do so is Hong Kong.

Turning to the situation across the border, Grantham thought that, although Mainland China was “a police state for the individual citizen,” it was an efficient one that had taken over the old administrative structures and had largely eradicated corruption. For the foreseeable future, he did not expect it to collapse of its own weakness. “The only substantial opportunity for the fall of the present regime would be the outbreak of a third world war.”

Given that the Korean War had only recently ended, and the Geneva Conference on Indochina, at which China had been a major presence, had been held that summer, China’s international outlook was of considerable interest. Addressing the prospects for Sino-Soviet relations, Grantham suggested that at some future date the Soviet Union, rather than the United States, would be the “substantial enemy of China.” Yet this was for the long term. One major force currently “preventing a split” between the two communist powers was, he believed, “mutual hatred of the United States.” Questioned further on his prognostications, Grantham even described the two communist powers as “closer today than ever before.”

Turning to China’s future external activities, Grantham thought the main question was “whether China at present merely wants to protect herself from hostile enemies, or whether she is a communist state on the march.” At least in the short term, he thought the former was true, and that China would not be expansionist. Grantham believed that “China wants about fifty years of peace in which to consolidate her position and to build.” Another Chinese concern, however, was to neutralize dangerous border zones with Vietnam and Korea. He saw no prospects that the Nationalists would regain the mainland.

Replying to a question as to how the United States might improve its relations with China, Grantham found it “very difficult to suggest practical steps to take toward communist China. We have to be firm but conciliatory. In any event,” he cautioned, “irresponsible statements in the United States are having a bad effect in China.”

Asked what value British control of Hong Kong had for China, Grantham replied that it provided “a peephole and a place in which to do business with foreign firms.” To an inquiry as to what might induce Britain to return Hong Kong to China, Grantham replied that, should “a reasonably responsible government” come to power in China, he believed “the force of world opinion” would impel Britain to give up the colony.[vi]

1956: “Some Critics Call [Hong Kong] a Benevolent Autocracy or even a Police State”

Two years later, in autumn 1956, Grantham—who had visited Beijing in the interim—returned to the Council to provide a “British Estimate of China.” His talk drew an audience of more than 150. Grantham concluded his talk by rather memorably “prophecying that while the 19th century had belonged to England, and the 20th to the United States, the 21st would belong to China.” One questioner inquired: “Would Russia’s century not be coming soon?” Grantham did not believe Russia would “ever be more than the second most powerful.”

In an effort to explain China’s mindset, he exhorted his audience to remember that China entirely shared the pervasive Asian resentment of European colonialism, a view “entrenched in the minds of even the most enlightened and best groups throughout the continent.” China was “a major world power” whose “rebirth and resurgence” would have been “inevitable” whether or not the Communists had come to power. Asked to assess “the quality of Red leadership and the vision that the Communists possess,” Grantham responded that—though Chinese Premier “Chou [Zhou Enlai] was known for turning on and off his charm”—he personally had “found him very charming.” He had met none of the other Chinese leaders, though they were reported to be “sincere and anxious to get on with their job.”

Seeking to determine whether the Chinese communists were “Russian-type doctrinaire party men” or “pragmatic in their adoption of Communism as the likeliest channel for the prosecution of their plans,” Grantham argued that China’s leaders had “adopted Communism for pragmatic reasons and sooner or later will drift or break away from the Russians, who, fundamentally, are much more the enemies and competitors of China than are the Americans or the British.” He did not, however, expect this to occur for at least five to ten years. Asked about relations between the Soviet Union and China, Grantham described them as “close, but . . . not an emotional tie.” Ultimately, he expected a future situation of “cold formality” between the two.

China had, Grantham argued, entered the Korean War, assisted the Viet Minh, and threatened Taiwan in 1954-1955 largely due to perceived albeit “erroneous” threats to its own security. With Vietnam divided and posing no danger to China, Grantham anticipated that for several years to come China would focus upon “industrialization” and economic development.

Grantham believed that the mainland government did not intend to take Taiwan by force any time in the near future. “The Chinese Communists are realists and Sir Alexander quoted Chou En-lai as saying to him that the Chinese had no intention of taking Formosa by force for it would fall from within.” Grantham expected Chiang Kai-shek, whom he considered “an honorable man and not corrupt or corruptible,” to “remain on Formosa as long as he lives.” He noted that Chiang had refused the Communist inducement of an offer of some high position in exchange for rapprochement. Discussing the offshore islands of Quemoy and Matsu, which had already been the focus of one major crisis in 1954-1955, Grantham resignedly suggested it would be “best if they sank and disappeared. Militarily they have no significance.” Their main function was as an “irritation” to the Communists and a matter of “prestige” to Chiang Kai-shek.

Grantham characterized Britain’s recognition of China as an asset, because it meant that “British requests and protests are being acted upon.” He nonetheless hoped any changes in US policy toward China would come only “slowly and very, very gradually, as it would be a grave mistake to go too fast.” Grantham anticipated that Hong Kong would revert to Chinese rule in 1997, not least because its water supply, airfield, and other essential facilities were in the leased portion of the territory. Believing that Hong Kong would ultimately be theirs, the Chinese therefore currently considered it “a low priority” on their “timetable”:

Vital facilities, including the water supply, the airfield, etc., are located on the leased land, without which it is impossible to maintain Hong Kong. This fact is known to everyone in Hong Kong but no one will mention it in public. Why should the Chinese therefore risk World War III for the colony?

Asked whether China could “take over Hong Kong without overt military action, gradually, through economic and other pressures,” Grantham replied that the mainland had “tried to blockade Hong Kong in the past and failed.” He raised the possibility that the Chinese might “channel all their shipping and trade to Shanghai,” measures he thought likely to be “quite effective.” Revealingly, he stated that in those circumstances, all would “depend on the readiness of the British treasury: to what extent is it willing to underwrite the ensuing deficit and subsidize Hong Kong?” Despite Hong Kong’s reliance on China for basic commodities, Grantham argued that its “food supply and other facilities are quite independent from the mainland since we could always supply Hong Kong from the sea.”

In reality, given the British Treasury’s perennial reluctance to spend money on Hong Kong, the chances of any such Berlin-style blockade-breaking were extremely low. Yet Grantham was determined to convince his American listeners that Hong Kong could survive a Chinese assault. Somewhat controversially, Grantham also cited Admiral Arthur W. Radford, chairman of the Joint Chiefs of Staff, as telling him “that Hong Kong must be defended and can be defended” by the United States. (Whether the notoriously interventionist Radford was speaking for the US government or himself was, of course, a moot question.)

Ultimately, Grantham believed the Chinese government had no great desire to take Hong Kong by force, not least because the British and perhaps the Americans would probably fight for it and destroy most of its infrastructure before they left. In Grantham’s view, Hong Kong was “of no use to Communist China except in times of peace when it serves as a peephole on the world and provides trading, insurance, banking and other facilities for her.”

Asked about the political stance of local Chinese in Hong Kong, Grantham stated that most were “anti-Communist but . . . not pro-Nationalist,” with many “undecided” in sympathy. China therefore tried to win over influential local Hong Kong people, and was currently conducting a “cultural offensive” targeted at such professionals as lawyers, teachers, and doctors. One major problem was that around eighty percent of mainland visitors to Hong Kong refused to return to China.

To enquiries about the territory’s constitutional position, Grantham remarked that “[s]ome critics” described Hong Kong as “a benevolent autocracy or even a police state.” Democracy was absent: the Legislative Council had no elected members, though some were nominated by specific groups and others directly appointed by the government. Even so, in the previous nine years the government had only once had to use its majority of appointees to win a vote. “In fact,” he contended, “the leading members do not wanted any elected representatives; the people are apathetic toward politics and also there would be a possibility of electing communist stooges.” Any Soviet presence in Hong Kong had been largely excluded. There was also no “recognized Red Chinese diplomat” in the territory, in part because 85 percent of Hong Kong people were still Chinese citizens, which could create difficulties, and also due to fears that any such representative might become an alternative power center and seek to “establish himself as king of the Chinese citizenry.”[vii]

1958: “The Best Window on China [and] a Symbol of Democracy”

Eighteen months later Grantham, who had just retired from his governorship, returned for a third time to the Council, for a relatively small dinner for 40 at which he was asked to discuss “the influence of Communist China on its neighbors in the northeast and to the south.”[viii]

By this time, efforts to prevent the further spread of communism in Southeast Asia were becoming a steadily and stealthily growing preoccupation for the United States government. Stating that while governor of Hong Kong, he “was constantly aware of the hot breath of Communist China breathing down his neck,” Grantham claimed to have been “neither intimidated nor deluded.” After describing China’s long decades of “intense humiliation” by Western powers, Grantham told Council members that since 1949, most Chinese had felt they possessed “a stake in their government. They think they have it even if they do not. The middle-classes feel that the humiliation of Western domination is really at an end.” Although merchants, the bourgeoisie, and many intellectuals had “become disillusioned” with the Communist regime, Grantham thought it unlikely to lose its grip on power.

Overseas Chinese now “essentially [felt] pride in their country even if they dislike its bias.” There was no prospect that the Nationalists on Taiwan could retake the mainland, and Communist China’s leaders were “convinced that eventually Taiwan will be theirs.” China faced major problems of internal development, and its leaders knew they needed to concentrate on these, not on “foreign adventures.” China’s past involvement in Korea and Indochina had been “due to fear of the United States,” not to any desire to embark on “military adventures.” He also thought it unlikely that China would split with the Soviet Union, if only because the Chinese military was still heavily reliant on Russian assistance. Even so, Grantham considered the mainland government China’s “strongest of the last 200 years,” warning: “The new China is [a] fact of life which the West will have to accept.” He thought it “quite possible” that the Chinese Communists would, without resorting to direct aggression, succeed in “detach[ing] parts of SE Asia” from the non-communist world.

Questioned about the situation in Hong Kong and its “value” to China, Grantham stated that the city was “one of the main sources of channels for funds from overseas Chinese” to reach China. For Britain and the “free world” it possessed value “not only as the best window on China but as a symbol of democracy.” Grantham quoted once more the words of Admiral Arthur W. Radford that “Hong Kong can and must be defended” against a Chinese attack. While the Chinese knew that Hong Kong, like Macao, would eventually return to China, they also recognized that any attack on Hong Kong would result in their receiving “a destroyed city.” Grantham defended Hong Kong’s decision not to join the new US-backed Southeast Asian Treaty Organization (SEATO), on the grounds that Hong Kong was “sitting on top of a volcano and Peking would only accuse it of being an American base.” Hong Kong’s membership in the organization “would damage security and gain nothing.”[ix]

“[T]he 21st [Century] Would Belong to China”

Grantham’s expositions to influential Americans of the situation in Hong Kong and China provide enlightening insight into the thinking of the British colonial official who was perhaps the foremost architect of Hong Kong’s Cold War system.

In some ways, Grantham tried to insulate and detach Hong Kong from the Cold War, at least where China was concerned, and maintain it as a zone not so much of neutrality as of interchange. To Americans, he consistently portrayed Hong Kong both as a territory that could if necessary be defended and one that deserved US support should mainland China attack it.

Simultaneously, Grantham downplayed (even though he did not entirely rule out) the likelihood of any serious Chinese effort to take over Hong Kong before its 1997 due date. The fact that treaties, no matter how unequal, ultimately mandated the return of more than 90-percent of Hong Kong’s territory to China by the end of the twentieth century was in itself a factor in the continued acquiescence of the People’s Republic of China in British administration of Hong Kong. So too, of course, were other decidedly more self-interested factors, both economic and geopolitical. China had no comparable window to the West, and capitalist Hong Kong and the Chinese compatriots there, not to mention the assorted networks to which it gave access, provided a variety of valuable economic and commercial services.

Inviting Grantham back to speak a second time, the Council’s executive director termed his first address “a ‘ten-strike.’”[x]   Another Council functionary felt that in 1954 he had talked “frankly and well on the situation in China as seen from Hong Kong.”[xi]  It is difficult to gauge just how much influence Grantham’s analyses had upon the arrays of distinguished American experts on China, Asia, and the world—John D. Rockefeller III, A. Doak Barnett, Reinhold Niebuhr, Paul Nitze, Kenneth W. Thompson, William J. Donovan, Thomas E. Dewey, Dean Rusk, and many others—who attended his various talks at the Council on Foreign Relations. Still, one can appreciate Grantham’s determined defense of Hong Kong while he simultaneously depicted China as a resurgent great power that would inevitably become a major force in international affairs. He provided sympathetic and informed insight into the grievances that numerous Chinese harbored toward their country’s treatment at outside hands in the previous ‘century of humiliation.’

Grantham retired at 60 and died in 1978, just as Deng Xiaoping won predominance in China’s internal politics. To the best of my knowledge, he made no detailed suggestions as to how the relationship between Hong Kong and China should ultimately be resolved. The most one can say is that he fought Hong Kong’s corner with all comers, yet simultaneously recognized and anticipated the enormous importance of China to international affairs. Both China and Hong Kong perhaps need more such Janus-facing and protean friends today.

[i] Steve Tsang, A Modern History of Hong Kong (Hong Kong: Hong Kong University Press, 2004), 153-156; Chi-kwan Mark, Hong Kong and the Cold War 1949-1957 (Oxford: Clarendon Press, 2004), 26-28; Christine Loh, Underground Front: The Chinese Communist Party in Hong Kong (Hong Kong: Hong Kong University Press, 2010), 65-66, 69-80; David Clayton, Imperialism Revisited: Political and Economic Relations between Britain and China, 1950-54 (Houndmills, UK: Macmillan, 1997), 100, 118, 120; and Cindy Yik-yi Chu, Chinese Communists and Hong Kong Capitalists: 1937-1997 (New York: Palgrave Macmillan, 2010), 37-39.

[ii] British Information Service, “Sir Alexander Grantham, G.C.M.G.,” Folder 1, Box 446, Council on Foreign Relations Papers; also Alexander Grantham, Via Ports: From Hong Kong to Hong Kong (Hong Kong: Hong Kong University Press, 1965).

[iii] Gavin Ure, Governors, Politics and the Colonial Office: Public Policy in Hong Kong, 1918-58 (Hong Kong: Hong Kong University Press, 2012), ch. 10.

[iv] Tracy Steele, “Hong Kong and the Cold War in the 1950s,” in Hong Kong in the Cold War, eds. Priscilla Roberts and John M. Carroll (Hong Kong: Hong Kong University Press, 2016), 105-106; see also Chi-Kwan Mark, “Defense or Decolonisation? Britain, the United States, and the Hong Kong Question in 1957,” Journal of Imperial and Commonwealth History 33:1 (January 2005), 60-62, 65, 67.

[v] George S. Franklin, Jr., to Alexander Grantham, July 9, 1956, Folder 5, Box 447, Council on Foreign Relations Papers, Mudd Manuscripts Library, Princeton University, Princeton, NJ.

[vi] Digest of Meeting, Sir Alexander Grantham, “China As Seen from Hong Kong,” September 29, 1954, Folder 1, Box 446, Council on Foreign Relations Papers.

[vii] Digest of Meeting, Sir Alexander Grantham, “A British Estimate of Communist China,” September 16, 1956, Folder 5, Box 447, Council on Foreign Relations Papers.

[viii] William Henderson to Grantham, January 2, 1958, Folder 1, Box 449, Council on Foreign Relations Papers.

[ix] Digest of meeting, Sir Alexander Grantham, “Communist China and Free Asia,” April 16, 1958, Folder 1, Box 449, Council on Foreign Relations Papers.

[x] Franklin to Grantham, July 9, 1956, Folder 5, Box 447, Council on Foreign Relations Papers.

[xi] Melvin Conant to Arthur Dean, September 11, 1956, Folder 5, Box 447, Council on Foreign Relations Papers.