The Chinese government resumed exercise of sovereignty over Hong Kong

The Hong Kong issue was left over from history. Hong Kong(including the Hong Kong Island, Kowloon and the New Territories) has been a part of China 's territory since the ancient times. Britain Launched the Opium War against China in 1840 and compelled the Qing government to sign the Treaty of Nanking, permanently ceding the Hong Kong Island to it. Britain and France launched the Second Opium War in 1856. In 1860, Britain forced the Qing government to sign the Convention of Peking, permanently ceding to it the southern tip of the Kowloon Island. In 1898, exploiting the establishment of sphere of influence in China by imperialist powers, Britain again forced the Qing government to sign the Kowloon Extension Agreement, "leasing" large area of land north of the Boundary Street of the Kowloon Island and over 200 islets nearby(later called the New Territories) for a term of 99 years until June 30, 1997. The Chinese people have always been opposed to these three unequal treaties.

After the founding of the People's Republic of China, the Chinese government took a consistent position over Hong Kong: Hong Kong is a part of China 's territory. China does not recognize the three unequal treaties imposed on it by imperialism. The Hong Kong issue should be resolved through negotiation when conditions permit, and the existing status of Hong Kong should be maintained pending a solution.

After the Third Plenary Session of the 11th Central Committee of the Communist Party of China held in 1978, the Chinese people endeavored to turn China into a modern socialist country, bring about the country's reunification and oppose hegemonism. Deng Xiaoping put forward the concept of "one country, two systems" for resolving the issues of Taiwan, Hong Kong and Macao. With the approaching of 1997, Britain was anxious to learn about China 's position on resolving the Hong Kong issue. It thus became possible to settle the Hong Kong issue.

The negotiations on resolving the Hong Kong issue between the Chinese and British governments proceeded in two phases. During the first phase, from September, 1982 when British Prime Minister Mrs. Thatcher visited China to June, 1983, the two sides discussed the guiding principles and procedures for conducting negotiation. During the second phase, from July, 1983 to September, 1984, the government delegations of the two countries held 22 rounds of talks on substantive issues concerning Hong Kong.