Hong Kong's new policy of developing closer relations with Taiwan was conceived in Beijing rather than Government House. Still, it is the right policy and is long overdue. In 1949, after communist troops swept Nationalist soldiers off the mainland and onto Taiwan, they continued marching south but stopped at the Hong Kong border. They could easily have taken over: the British were in no position to resist.
However, leaders wisely decided that it was better to leave Hong Kong in British hands. Part of the reason was Hong Kong's value to the mainland in generating foreign exchange and serving as a pipeline to the outside world. But to a large extent, the communists allowed Hong Kong to maintain its separate existence because it had a useful role in the 'liberation' of Taiwan which, then as now, was Beijing's top priority.
Hong Kong was a place where communists and nationalists could meet and talk, and not attract attention. True, the mainland failed to get Taipei to throw in the towel - even after the US recognised Beijing as China's sole legal government. But Hong Kong's usefulness was shown by the fact that representatives of the two sides were able to meet here without publicity in 1992 and agree on 'one China', while leaving the definition vague. As a result, Taiwan and the mainland were able to hold high-level talks in Singapore the following year.
The departure of the British created a problem, which Beijing resolved with Qian Qichen's 'seven points' in 1995. Essentially, they called for the continuation of the status quo.
Since the British had no official contact with Taiwan, Beijing decided that the post-1997 Hong Kong government also could not have any official contact unless it received special permission.
So Hong Kong could not have a Taiwan policy. That remained in the hands of the central government. Even though the first chief executive, Tung Chee-hwa, appointed Paul Yip Kwok-wah as his Taiwan adviser, Mr Yip had no power and Hong Kong simply implemented policy made by Beijing.
The declaration by Taiwan's president Lee Teng-hui in 1999 that Taiwan and the mainland had 'special state-to-state relations', followed by eight years of rule by Chen Shui-bian, of the pro-independence Democratic Progressive Party, meant that Hong Kong's attitude towards Taiwan was frozen in hostility.