(This essay was published in Hong Kong Economic Journal on 24 June 2015.)


Professor Kathryn Tidrick in her book Empire and the English Character has an interesting passage recounting a Sir Hugh Clifford, Governor of British Ceylon in the 1920s, who had “… wondered aloud why other nations required so many more men than the British to keep the natives down. If Britain, for instance, only needed 500 men to rule India, with its population of 300 million, why were the French unable to get by with less than 200 fonctionnaires for one and a half million Cambodians?”


Tidrick was interested in distilling the English character when the nation had an empire to run, and some of its consequences. She came to rather mixed conclusions and was not very complimentary. Her study, however, led me to take another look at how the British in Hong Kong handled the hostile indigenous rural inhabitants in the New Territories (NT) after taking over in 1898.


The takeover date of the NT was 17 April 1899 and Tai Po was chosen as the administrative center. The transfer was not smooth and peaceful. Feeling abandoned by the Qing government and fearing for their traditional land rights and land use, and way of life, the Chinese clans mobilized the clan militias and attempted to resist the British takeover of the territory.


The ensuing Six-Day War of 1899 was fought between 14–19 April 1899, by the British Empire and the major punti clans of the New Territories. 125 Indian soldiers of the Royal Hong Kong Regiment were sent to Tai Po on 15 April and were soon besieged by the villagers. On 17 April the British forces launched an attack on the insurgents in Lam Tsuen Valley (West of Tai Po) and chased them up the hill.


On 18 April the clans, numbering some 1,600, assaulted the British troops at Sheung Tsuen (near Yuen Long) but were soon defeated. Further resistance was ended when British artillery was pointed towards the punti walled villages and the insurgents and villagers surrendered on 19 April.


This was quite a resistance; for at that time the NT was estimated to have about only 100,000 inhabitants in around 800 villages. The assault against the British clearly showed the villagers were well-organized and well-led, and harbored intense feelings of hostility and anxiety. The British government decided they could not displace so many people as they had done on Hong Kong Island.


To prevent future resistance, they realized they had to respect Chinese traditional laws and culture.


Concessions were made to placate the indigenous inhabitants with regards to land use, land inheritance and marriage laws. Arrangements were made so that residents could prove ownership and be given title to their land. Some of the concessions with regard to land use and inheritance remain in place in Hong Kong to this day and are a source of friction between indigenous inhabitants and other Hong Kong residents.


In land administration, two systems were operated: one for the NT and another for the rest of Hong Kong. Land belonging to the indigenous villages was gradually incorporated into the land registry and officially entered as agricultural use.


Much of the NT was rural and to some degree it still is. Development did not become fully implemented until the 1970s, when many new towns were built to accommodate the population growth. The 1967 riots were a critical precipitating factor and it soon became obvious that a shortage of housing was the most serious source of discontent among the population then, just as it is today.


An aggressive policy to build more housing required the resumption of large tracts of agricultural land in the NT on a scale that had never happened before. This required a hugely expanded issuance of Letters A/B and the introduction of the Small House Policy.


Letters A/B were issued starting from January 1960 as an alternative to cash compensation when private land was to be resumed in the New Town Development Areas of the NT. They offered landowners a choice of either a cash payment at a stated rate or an entitlement to the future grant of land in any urban development area in the NT at some unspecified time in the future.


This system was devised to facilitate the speedy acquisition of private land for public projects and avoid payments of cash compensation and lengthy arguments over the level of compensation. Letters A/B were first used for the resumption of land to form part of Tsuen Wan New Town. Despite their open-ended nature, nearly all landowners opted for Letters A/B rather than cash.


In the early and mid-1970s, the outstanding commitment of Letters A/B awaiting an exchange had risen to about 36 million sq. ft. As a large percentage of the new land created for the New Towns was being taken up by public housing, infrastructure, town halls, swimming pools, and schools, there was disproportionally less new land available for private uses to offer back to owners of Letters A/B.


Recognizing the huge problem that this ever increasing commitment would have on future land supply, the government scaled back the exchange ratio of the Letters A/B offer to 50% of land taken from July 1978 and stopped issuing them altogether by March 1983.


The creation of the Letters A/B system allowed government to resume large tracts of land without paying cash or interest and without risking damaging confrontations. For the landowners, it meant a speculative future in land that they could trade and which they preferred.


It was a win-win situation. Furthermore, as Hong Kong operates a leasehold land system where the government is also the monopoly land authority, it could in theory control and regulate the flow of new land onto the market to redeem the commitment.


The huge outstanding commitment of Letters A/B in effect dictated that the majority of the government’s NT land sales up until 1997 were by way of Letters A/B tender, with disproportionally less land being made available for sale by public auction.


In the latter years, the vast majority of Letters A/B were purchased on behalf of four major property development companies, giving them an undoubted advantage because these sales were, in effect, a restricted tender.


Another consequence of the development of New Towns in the NT was to destroy the traditional way of life of the descendants of indigenous inhabitants. The Small House Policy was introduced by the government and operated administratively in late 1972. It became one way of compensating the indigenous population by ensuring that their needs and traditions were respected and that they could also benefit from the major changes that were being forced upon them.


The shortcomings of this policy are that the commitment is open-ended, the land grants represent an inefficient use of land resources, and the system has been extensively abused. Today, NT villagers are seldom rural people and can be reasonably housed in more efficient high-rise apartments.


The villagers have, in increasing numbers, only used the preferential land grant to make a quick profit. A high percentage of these units get approved for alienation. This makes a mockery of the original purpose for granting the land, which was to enable the villagers to provide homes for themselves within their own village.


Nevertheless, the Small House Policy and the Letters A/B system were important innovations to resume land for housing development in a ‘non-coercive way with compensation’.


Non-indigenous residents today consider the offered compensation as unacceptably generous.  But what is unique in the British colonial approach is the willingness to seek a mutually acceptable accommodation and to avoid unwarranted conflict. A willingness to tolerate and, therefore, respect the rights and traditions of the local inhabitants;and, where conflict was unavoidable, to stick to a commitment to resolve conflicts according to a rule-based process. The spirit of the latter is best revealed in a court case over the whether rural land in the NT must be restricted to agricultural use as entered into the land registry.


In the 1983 court case of Attorney General v Melbado Investment Limited, the government contended that the lot was restricted to agricultural use, while the land in question was being used for the storage of steel girders. The Hong Kong Court of Appeal held that ‘The use of the land as listed in the schedule to the Crown lease was descriptive only. The purpose of the schedule was to identify the lands to which the lease related..… It would be absurd to construe the lease so as to compel a lessee to maintain a lot as a broken latrine for 75 years.’


The effect of the decision was that land described as agricultural under the Block Government Lease was not restricted to that use but could be used for any purpose that did not require a building. The NT became an open storage area for container boxes, causing pollution and traffic chaos as Hong Kong became the world’s busiest container port.


It is fascinating to note that unlike the British, the Portuguese, Spanish and French modeled their empires on their own centralized bureaucracies – trying to create a culturally united system, which included their colonies – based on one religion, language, educational system and national identity. The British model in India was not one of absorption but of tolerance of diversity, so that as long as British interests in making money were not threatened, people were allowed to retain their local customs and culture. The local inhabitants would never become ‘British’.


The answer to Sir Hugh Clifford’s puzzlement is apparent. Five hundred men is sufficient to hold down 300 million if your purpose is to tolerate diversity and not to absorb people into your fold. Limited means were sufficient to accommodate limited goals. The downside, noted Professor Tidrick, was with less than full engagement, there was also the missed opportunity to achieve more. But then more can sometimes be less!




Kathryn Tidrick, Empire and the English Character: The Illusions of Authority, St Martin’s Press, London, September 1990.

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