Faced with increased openness by the government of the People`s Republic of China and economic reforms on the continent, Margaret Thatcher, then British Prime Minister, sought the agreement of the People`s Republic of China on the continuation of the British presence on the territory.  Hong Kong`s autonomy was guaranteed by the “one country, two systems” agreement, enshrined in the Sino-British Declaration signed in 1984 by then-Chinese Prime Minister Zhao Ziyang and British Prime Minister Margaret Thatcher. The agreement signed in 1984 was to last until 2047. Some political analysts felt that an agreement was urgently needed, as there were fears that Hong Kong`s economy would collapse untreated in the 1980s. Concerns about land ownership in the new leased territories also contributed to the problem. Although discussions on Hong Kong`s future began in the late 1970s, the final date of the joint declaration was influenced by factual and economic factors rather than geopolitical imperatives.  On 19 December 1984, after years of negotiations, the British and Chinese leaders signed a formal pact authorizing the colony`s turnover in 1997, in exchange for formulating a Chinese Communist government policy with a “one country, two systems”. Prime Minister Margaret Thatcher called the agreement “a milestone in the life of the territory, in anglo-Chinese relations and in the history of international diplomacy.” Hu Yaobang, the general secretary of the Communist Party of China, called the signing “a day of red letters, an occasion of great joy” for one billion people in China. The list includes Hong Kong government officials, members of the legislative and executive councils, presidents of Hong Kong and Shanghai Banking Corporation and Standard Chartered Bank, prominent businessmen such as Li Ka-shing, Pao Yue-kong and Fok Ying-tung, Martin Lee Chu-ming and Szeto Wah. But before Hong Kong returned, Britain and China reached an agreement to introduce “one country, two systems.” The signing of the joint declaration caused some controversy in the United Kingdom, as British Prime Minister Margaret Thatcher accepted the Chinese Communist government, represented by Deng Xiaoping.  In the White Paper containing the Joint Statement, Her Majesty`s Government stated that “the alternative to the adoption of this agreement is not to reach an agreement”, a statement that refuted criticism that the Declaration had made too many concessions to China and highlighted China`s considerable influence during the negotiations.  In March 1979, Hong Kong Governor Murray MacLehose made his first official visit to the People`s Republic of China (PRC) and took the initiative to raise the issue of Hong Kong sovereignty with Deng Xiaoping.
 Without clarification and definition of the official position of the Government of the People`s Republic of China, it would be difficult to arrange real estate and loan leases in Hong Kong in the next 18 years.  This group was a liaison body, not a power organ, where each party could send up to 20 support staff.