Margaret Thatcher, who died on Monday, may not have been one "for turning", as she dubbed her putative inability to not ever alter basic principled direction. But when the first woman to become British prime minister first met the leader of China - Deng Xiaoping in 1982, over the Hong Kong sovereignty issue - she wasn't keen on losing either.

That's because the short, chain-smoking, astute successor to Mao Zedong wasn't "for turning" either. Just as the Iron Lady had not been intimidated out of the Falklands/Malvinas, Deng wasn't "for turning" on the issue of China's takeover of Hong Kong. The return of the territory to China was going to happen whether the Iron Lady and the British people liked it or not - and in the manner that Beijing, not London, wished.

"... He was obdurate ... He was not to be persuaded," recalled Thatcher of the exchange with Deng in September 1982. "At one point he said that the Chinese could walk in and take Hong Kong later today if they wanted to."

In 1993 over lunch, when her memoirs were published, I was to press her on this point, playing dumb and saying something like: But Baroness Thatcher, you were steadfast on Argentina, so principled. Therefore, if the Chinese army poured across the border in 1982, you would have sent the British navy sailing to uphold British sovereign honor, right?

Thatcher peered at me over her copy of The Downing Street Years on the dining table and almost scoffed at my silly joust: "My dear sir," I can recall her memorably responding, "when the prime minister of Great Britain orders her armed forces into war, it needs to be a war she can win, not one she will lose. The Chinese would have creamed us!"

Principle, you see, works best when it is plausible. Thatcher knew Britain's hold over Hong Kong acquired so dishonorably in the century before was, as it were, history. China's time on the world stage had come. Even the coldest of the "Cold Warriors" of the West could see that.

Indeed, in the 1993 memoirs, Thatcher notes that she had very few cards to play and so responded to Deng's threat of military action in the only way she could: "I retorted that they could indeed do so. I could not stop them. But this would bring about Hong Kong's collapse. The world would then see what followed a change from British to Chinese rule." Deng, whom Thatcher described as a highly intelligent realist, then looked off as if accepting that a fair point had been made. "For the first time he seemed taken aback," her memoirs say . "His mood became more accommodating."

In fact, as history played the Hong Kong handover game out, Britain and China both had to become more accommodating of each other. China got Hong Kong back but Britain did not have to give up its dignity.

For its part, London had to learn quickly that the new leaders of China were no dogmatic dolts. And they did learn - but they needed special guidance. "I received further advice from someone whose (had) experience in dealing with the Chinese I knew to be unequalled ... I discussed our problems ... with Lee Kuan Yew, the prime minister of Singapore." As it happened, Thatcher got some good, levelheaded input: "It was crucial, he said, that we should adopt the right attitude - neither defiant nor submissive, but calm and friendly. We should say clearly that the fact was that if China did not wish Hong Kong to survive, nothing would allow it to do so ... I now had to accept that China's concern for its international good name would allow us only so much latitude. Mr Lee's advice therefore confirmed me in the course upon which I had decided ..."

And so it was that on July 1, 1997, Hong Kong was formally and unequivocally returned to the sovereignty of China. For all the possibly sincere tears of Prince Charles and the tactical shenanigans of the last British governor Christopher Patten, history's march took its planned course. It was then, in my view, that the "Asian Century" was born - if technically three years prematurely.

What lesson do we draw from this dramatic story? Certainly in hindsight we can see that the advice on how to deal with China from the then Singapore prime minister - be calm and friendly, not defiant or submissive - was very good then and remains very good now.

The West needs to bear in mind that the end of history did not occur with the fall of the Berlin Wall. The rise of China and Asia shows history still churning and turning. And the Hong Kong handover in 1997 was one of the 20th century's pivotal turns.

What an irony for the Iron Lady herself to have been present at that. So darn proud when the Soviet Union collapsed, the lady had to fold her hand in the face of China's rise.

But at least she was a realist. And so should we who survive her in the West be today about China and its continuing rise.

The author is Loyola Marymount University's designated distinguished scholar of Asian and Pacific Studies. He is the author of the Giants of Asia book series and the founder of Asia Media.

(China Daily 04/12/2013 page9)