His ambassadorship witnessed the start of the Sino-British negotiations in 1982, which subsequently resulted in the Joint Declaration in 1984, an agreement deciding the future of the sovereignty of Hong Kong after 1997.
However, the decision of Cradock, who was the British chief negotiator in the negotiations, to compromise with the Chinese authorities, was regarded as a major retreat by the general media in Hong Kong and the United Kingdom, and was heavily criticised at that time as betraying the people of Hong Kong.
Cradock remained a trusted advisor to the then Prime Minister, Margaret Thatcher, who appointed him as Chairman of the Joint Intelligence Committee in 1985.
After the Tiananmen Square protests of 1989, he was the first senior British official to pay a visit to the Chinese leadership in the hope of maintaining the much criticised Joint Declaration.
He was successful in fighting to guarantee, in the Basic Law of Hong Kong, that half of the seats of the Legislative Council would be directly elected by 2007.
However, Cradock worsened his relationship with Thatcher's successor, John Major, by forcing him to visit China in 1991 after the row between the two countries over the Airport Core Programme of Hong Kong.
Major had enough of the compromising attitude of Cradock and the-then Governor of Hong Kong, Sir David Wilson, and finally decided to have both of them replaced in 1992, choosing instead his Conservative-ally Chris Patten as Governor.
Unlike his predecessors, Patten was strongly criticised by the Chinese authorities during his governorship because he introduced a series of democratic reforms without consulting them.
Although Cradock had retired, he joined the pro-Beijing camp, and became one of the most prominent critics of Governor Patten, censuring him for wrecking the hand-over agreement that had been agreed with the Chinese government.
Cradock and Patten blamed each other publicly a number of times in the final years of British administration of Hong Kong.
He once famously denounced Patten as an "incredible shrinking Governor", while Patten mocked him openly, in another occasion, as a "dyspeptic retired ambassador" suffering from "Craddockitis".Cradock spent his later years in writing a number of books on realpolitik diplomacy and was a non-executive director of the South China Morning Post.