In June of 1989, as a result of a widely known incident, China was thrust into the global spotlight. The Sino-British talks took a dramatic turn following a hundred and eighty degree shift in British attitude. Looking at the ongoing disintegration of the Soviet bloc, they wrongfully judged trends within China and scrambled to shift their policy course, in a vain attempt to turn back the clock by upending the Joint Declaration. They began their scheming again, throwing obstacle after obstacle in the path of the Joint Liaison Group. The work of the specialized sub-committees grounded to a halt. Some were suspended for four, five, six years, with unpredictable consequences.
In mid-June, the British cancelled the thirteenth meeting of the liaison group, which had been scheduled to be held in London from July 17 to July 21, saying the meeting would be postponed indefinitely. At the same time, the British made a preposterous advance to Xu Jiatun, the head of Xinhua News Agency's Hong Kong office at the time.
In Zhou Nan's memoirs he writes, "The British conspired to send several people to Xu Jiadun, to get him to put forth the absurd suggestion that there was no rush for China to take back Hong Kong, and that it should be left under British control. They said that Hong Kong could find a way to scrape together enough money to present the central government with an 'offering', disguised in the form of a 'lease' valued at several billion dollars or more each year. But wouldn't that just be casting aside the Joint Declaration? Xu Jiadun called it an 'important policy,' and sent it up the line to Beijing. The central government was furious…"
On December 4, Margaret Thatcher sent her foreign policy advisor Percy Cradock, in the capacity of special envoy for the prime minister, on a secret visit to China. Cradock was carrying with him a formal letter from Thatcher to Jiang Zemin.
As Qian Qichen recalls, Thatcher wrote in her letter of her hopes that both sides could work to reverse the deterioration in bilateral ties, and to recover the strong communication of the past. She gave her guarantee that Hong Kong's having inadvertently become a staging ground for people seeking the overthrow of China was not a move to "internationalize" the Hong Kong question. She soon after came to the real point of the letter: Britain was under pressure to greatly augment the number of directly elected members of the LegCo in 1991, and requested that China, in drafting the Basic Law, coordinate with the British side's arrangements.
During his meeting with Jiang, Cracock said, "if the two sides are able to come to an understanding on the Basic Law and the question of direct elections, it would unlock the door to healthy bilateral ties."
Jiang immediately rebuffed this attempt to conjure a bargaining chip out of thin air. Thinking back on the reply letter he wrote to Thatcher, Jiang said: "I told Prime Minister Thatcher that maintaining the stability and prosperity of Hong Kong was our fundamental national policy. Britain was playing with fire by playing the democracy card. There were even people cooking up schemes for Britain to pay a billion pounds in rent per year for Hong Kong post-1997. I said, you're offering a billion, but I wouldn't sell out Hong Kong for ten billion, or for a hundred billion! I was absolutely not going to make myself into another Li Hongzhang!"
Meanwhile, the Basic Law drafting committee had run into trouble. Several of the members from Hong Kong, incited by the British government, tried to rewrite the hundred and sixty already agreed-upon clauses. To arrive at this point, the committee had already met over ten times and drafted each of the hundred and sixty clauses line by line, with each clause requiring the approval of two-thirds of the committee members to be passed. The National People's Congress (NPC) was soon to convene its March, 1990, meeting. If the committee members were not able to pass a draft version of the Basic Law by that point, then there was no way to submit the Basic Law to the NPC for passage. Lu Ping was driven up the wall by this turn of events.
On February 16, 1990, the drafting committee held its ninth plenary meeting, at which an anonymous final vote was taken on the Basic Law. When the results were counted, the Basic Law had, thankfully, received the votes of more than two-thirds of the committee members.
In March of 1990, at the NPC's vote tabulation site in the Great Hall of the People, upon learning that the Basic Law had received the sanction of the NPC delegates, 56 year-old Lu Ping was moved to tears. No one understood better than he how challenging the Basic Law's drafting had been, consuming the lives of fifty-nine committee members over four years and eight months. Every section, every clause, every line, every word had, prior to their passage, been subject to serious discussion and heated debate between committee members.
On July 1, 1997, the Basic Law would go into effect in Hong Kong, superseding more than a hundred years of "Hong Kong Letter Patents" and "Royal Instructions" . Deng Xiaoping had high praise for the Basic Law: "Through nearly five years of hard work, you all have created a law of historic and international significance. Its historic significance is not just for the past and the present, but for the future as well. Its international significance is not just for the Third World, but will be of enduring significance for the entire human race. This [law] is a creative masterpiece!