Britain tells China: Seek peace in Hong Kong and allow freedoms

By William James and Guy Faulconbridge BIRMINGHAM England (Reuters) - In Britain's strongest comment yet over clashes between Hong Kong riot police and pro-democracy protesters, finance chief George Osborne urged China to seek peace and said the former colony's prosperity depended on freedom. Britain had until Tuesday been wary of angering Beijing with anything that could be interpreted as meddling in the affairs of Hong Kong, which it handed back to China in 1997 after ruling it for more than 150 years. London's reticence has angered some democracy campaigners who contend that Britain's leaders had put tens of billions of dollars in investment flows ahead of a British pledge given in 1997 to allow Hong Kong's people to run their affairs. When asked what he would say to the Chinese authorities, finance minister Osborne, Britain's second most powerful politician, said: "That they work to a peaceful resolution of the situation." Speaking at a meeting with reporters and party activists at the Conservative party conference in the English city of Birmingham, Osborne said the future prosperity of Hong Kong - one of the world's financial capitals - depended on freedom. "It is a concerning situation of course. I don't want to add to the tension, but I think Hong Kong's prosperity and future is dependent on some of those basic freedoms around the freedom to protest and the freedom to participate in their government," Osborne said. China rules Hong Kong under a "one country, two systems" formula that accords the former British colony a degree of autonomy and freedoms not enjoyed in mainland China, with universal suffrage set as an eventual goal. "We have to work out a solution that is consistent with Hong Kong being part of the two-China policy. I think it is possible but it is clearly a very, very concerning situation," Osborne said. "It's a reminder of what people, here we are at a democratic party conference, of what people are prepared to risk in order to achieve what we take completely for granted," he said. In a sign of growing alarm in London, British Deputy Prime Minister Nick Clegg said on Tuesday he had requested an urgent meeting with the Chinese ambassador to express his "dismay and alarm" over the situation in Hong Kong. "The Chinese authorities in Beijing seem determined to refuse to give to the people of Hong Kong what they are perfectly entitled to expect, which is free, fair, open elections based on universal suffrage," Clegg said. DEEPLY CONCERNED Osborne, as the man responsible for Britain's $2.8 trillion economy, has championed Chinese investment and sought to capture European dominance of off-shore yuan trading for London. Western leaders fear that China could decide to crush the Hong Kong protests, one of the biggest internal challenges to authority since the crackdown on pro-democracy protesters in Beijing's Tiananmen Square in 1989. Chinese President Xi Jinping, who is steeped in the belief that loosening control could lead to chaos and the eventual break up of China, has repeatedly implored officials to heed the lessons of the 1991 collapse of the Soviet Union. British Prime Minister David Cameron said on Tuesday he was deeply concerned about the situation as tens of thousands of pro-democracy protesters extended a blockade of Hong Kong streets. "I am deeply concerned about what is happening and I hope this issue can be resolved," Cameron said. Student leaders have given Hong Kong leader Leung Chun-ying an ultimatum to come out and address the protesters before midnight on Tuesday. The protesters, mostly students, are demanding full democracy and have called on Leung to step down after Beijing ruled a month ago that it would vet candidates wishing to run for Hong Kong's leadership in 2017. While Leung has said Beijing would not back down in the face of protests it has branded illegal, he also said Hong Kong police would be able to maintain security without help from People's Liberation Army troops from the mainland. (Writing by Guy Faulconbridge; Additional reporting by Kylie MacLellan; Editing by Tom Heneghan)