This article examines Thatcher’s 1982 visit to China concerning Hong Kong’s future. The visit occurred at the critical historical junctures of the rise of Thatcherism in post-Falklands Britain and of the growth of Deng Xiaoping’s nationalist sensitivities. With her strong belief in capitalism, Thatcher aimed to convince Deng that Hong Kong’s prosperity depended on confidence, which in turn rested on the continuation of British administration beyond 1997. With his nationalist feelings towards Taiwan stirred by America, Deng regarded Hong Kong’s return to China as a non-negotiable principle. Thatcher’s project of ‘educating’ Deng in capitalism was doomed to failure.