This paper analyses how British political actors approached the negotiations over the future of Hong Kong. It does so by drawing on declassified documents from the Prime Ministerial archives of Margaret Thatcher and Foreign and Commonwealth Office files, amongst other sources. This paper begins in 1979, when the British first proposed to extend their administration over Hong Kong beyond the 1997 expiry date of the lease which covered the majority of Hong Kong, and ends in 1982, when Thatcher met with China’s leaders, Zhao Ziyang and Deng Xiaoping. During this period, the British saw the Hong Kong issue as primarily an economic one and regarded their proposal of continued British administration as a selfless one. The position Thatcher took on the issues of sovereignty and the validity of the treaties caused offence which increased Chinese suspicions of Britain’s proposals and delayed the start of formal negotiations.