Deteriorating relations between Britain and China over Hong Kong's political future has cast a pall over the colony's financial markets. The pound fell to its lowest level against the dollar since June last year as investors fretted about Britain's decision on whether or not to stay in the European Union. Patten has repeatedly indicated a go-it-alone possibility marking a change in British policy toward Hong Kong and China, which had placed priority on reaching agreement with Beijing. China claims that financing proposals from the Hong Kong government would put a heavy financial burden on the post-1997 community. But Lu's threat, calculated to scare the international financial community, could make it difficult for the government to raise external finance to fund the project. China could sacrifice the economic well-being of its people in response to a perceived threat to its authority.
Deteriorating relations between Britain and China over Hong Kong's political future has cast a pall over the colony's financial markets. The pound fell to its lowest level against the dollar since June last year as investors fretted about Britain's decision on whether or not to stay in the European Union. Patten has repeatedly indicated a go-it-alone possibility marking a change in British policy toward Hong Kong and China, which had placed priority on reaching agreement with Beijing. China claims that financing proposals from the Hong Kong government would put a heavy financial burden on the post-1997 community. China could sacrifice the economic well-being of its people in response to a perceived threat to its authority.