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6 Cowperthwaite Is Reined In: 1961–1971 Overview Sir Arthur Clarke was succeeded by Sir John Cowperthwaite, who was Financial Secretary from 1961 until 1971. The decade was marked by the continuation of the remarkable economic growth which had begun in 1945.1 As before, this growth produced “automatic” increases in the government’s revenues, from $1,062 million in 1962 to $2,981 million in 1970. This in turn enabled the government to increase its spending enormously whilst simultaneously running large surpluses. To take a single striking instance: in 1970 Cowperthwaite granted a number of minor tax concessions, apparently because he thought the government simply did not need the money; but as a result of the growth of the economy, the government’s revenues were nevertheless 20 percent more than the year before. As a result of economic growth and consequent surpluses, the government’s reserves rose from $412 million in 1961 (equivalent to five months’ total public spending) to $2,380 million in 1971 (twelve months’ spending).2 By the 1960s the Hong Kong government had not only discharged its indebtedness to Britain, but gone on to become one of Britain’s larger creditors. Also, the Colony’s population continued to increase, mainly as a result of the continuing flow of new arrivals from the Mainland, from three million at the beginning of the decade to four million at the end. Another change, less tangible but no less important, was that the Colony’s residents tended increasingly to regard Hong Kong as “home”, and themselves as “Hong Kong people”, rather than as “sojourners”, “squatters” or “refugees”.3 The majority of the populace, however, lived in conditions of extreme deprivation (though less extreme than in the Mainland). The Colony’s economic growth was spectacular, but so too was the gap between the rich and the poor. Partly for this reason, there were riots in the Colony in 1967, and again in 1968. For Britain, the 1960s were a period of relative economic decline and fading international prestige. For the Chinese government, the decade was mixed and led to the visit of the American President, Richard Nixon, to Beijing in 1972 and 150 Taxation Without Representation China’s accession shortly afterwards to the United Nations and a permanent place on the Security Council. By the 1960s it had become clear that Hong Kong remained a British colony entirely at the sufferance of the Chinese government: until 1958, the official British position was that the Colony was militarily defensible, but thereafter no further pretence was made.4 The British regime in Hong Kong depended on China not only for its passive acquiescence, but also for food and water, and even for China’s active policing of the border: “All they have to do,” as one civil servant put it, “is to send in two million of the buggers ... and we can kiss it all goodbye.”5 Britain and the other European powers continued to surrender their colonies around the globe. Almost all the substantially populated colonies had already become independent — for example India and Pakistan in 1947 and Malaysia in 1953 — and enjoyed at least a shot at democracy. Hong Kong, however, was allowed neither independence nor democracy.As time went on, and the territory’s status became increasingly anomalous, the colonial government tended increasingly to justify its existence and its actions as being in accordance with the wishes of the Hong Kong people. For example, in 1968 the Governor, Sir David Trench (who had succeeded Sir Robert Black in 1964), explained that the “primary aim” of the government was “improving and raising the standards of living of our people” (though later the same day, Cowperthwaite gave the game away when he observed that the Legislative Council’s “primary duty” was “controlling public expenditure” and “generally to ensure that we are not in danger of living beyond our means”).6 Given the wholly undemocratic system of government, this presupposed that the government knew what the people wanted and formulated policy accordingly. The government stated its position thus: We have no general elections for the central government and yet the general trends of government policy conform to the wishes of the mass of the people…. The government here through formal councils, committees and boards, through reading the press, through informal contacts with individuals and groups, in high station and low, has its antennae tuned constantly to public wishes in a thousand fields of our administration…. Our methods can certainly be improved, our...

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