Hong Kong's Handover to China

Minutes before midnight on June 30, in a ceremony at a convention center on Victoria Harbor, the British and Hong Kong flags will be slowly lowered. A few minutes after midnight on July 1, China's five-starred red flag will be raised. After 156 years as a British colony, Hong Kong will begin a new and uncertain future as a Special Administrative Region of the People's Republic of China. As a result of an agreement reached by London and Beijing 13 years ago, Hong Kong will for 50 years enjoy its own capitalist system, common-law legal system, and a "high degree of autonomy" under its own constitution.

History

How did Britain come to rule Hong Kong?

The British and the other Europeans and Americans had been exporting opium to China from the outposts in Canton (now Guangzhou) when the Chinese emperor sent the commissioner Lin Zexu to halt the traffic in 1838. He expelled the British from Canton and later from Macau, where they had taken refuge. Skirmishes in the waters around Hong Kong prompted the British to send their Navy to Chinese waters, culminating in the First Anglo-Chinese war, better known as the "Opium Wars" (1839-42).

As a consequence of its defeat, the Imperial court signed the Treaty of Nanking, which ceded what is now Hong Kong Island to Britain "in perpetuity" as well as opening other treaty ports along China's coastline and paying an indemnity. The Chinese view this as the beginning of 100 years of humiliation at the hands of the Europeans that is only now being rectified by the return of Hong Kong. While not proud of the part opium played, the British viewed the disagreeable episode as at least ending China's traditional tributary diplomacy and not treating Europeans and other foreigners as equals.

What is the significance of 1997?

Britain only took permanent control of Hong Kong Island and later also gained the tip of the Kowloon Peninsula. In 1898 it leased for 99 years a much-larger hinterland and group of offshore islands that are still known as the New Territories. The lease expires at midnight June 30, which is the reason Hong Kong is being returned at that moment. That still leaves Hong Kong Island at the tip of Kowloon supposedly ceded to Britain permanently. It quickly became obvious to British negotiators, and to anyone living here, that Hong Kong is not viable or defensible without the New Territories, which make up 92 percent of its land mass. That is the reason the entire colony, leased and ceded lands, is being returned to China.

Why didn't China just take Hong Kong before 1997?

No Chinese government since the fall of the empire in 1911 has recognized British rule over Hong Kong officially. The Treaty of Nanking is dismissed as an "unequal treaty," the concessions exacted under duress.

Since the end of World War II, China has always had the power to take Hong Kong back by force anytime it chose. Even without using force, it had means to make the colony untenable by denying water and food, or by encouraging refugees to flood in. But Beijing refrained because Hong Kong served China's interests as a window to the outside world and a source of investment capital for development.

How important was Hong Kong to Britain?

Not very. For most of the 19th century Hong Kong was only one among numerous British colonies, concessions, and treaty ports along the China coast. Hong Kong reached its nadir under Japanese occupation during World War II, bouncing back to become one of the most prosperous cities in Asia.

In recent years, Hong Kong has not been much of a direct benefit or a drain on Britain. None of Hong Kong's taxes or enormous foreign reserves are remitted to Britain (nor will they go to China). London has basked in the reflected glory of Hong Kong's enormous success, which it attributes to such British attitudes as rule of law (but not democracy) and laissez faire economic policies.

What does the term Hong Kong mean?

In Cantonese it means "fragrant harbor." The Mandarin Chinese name, Xianggang, means the same thing.

Recent years

How did British rule end?

The key was the looming expiration of the lease on the New Territories. In 1979 then-Gov. Murray MacLehose went to Beijing, the first Hong Kong governor to meet with the Chinese leadership. On his mind was the validity of commercial leases extending beyond 1997, and his purpose was to sound out China's intentions.

A later visit by Prime Minister Margaret Thatcher launched a series of negotiations, which culminated in the Joint Declaration, signed in 1984, in which Britain agreed to return all of Hong Kong and China agreed to keep capitalism and far-reaching autonomy for 50 years.

Why did the Communists agree to allow Hong Kong to keep its capitalist system intact?

At that time, Chinese leader Deng Xiaoping was casting about for a peaceful means of reunifying the country. He came up with a policy summarized as "one country, two systems." This meant that within the People's Republic of China, the mainland, with its 1 billion people, would maintain the socialist system while Hong Kong, Macau, and Taiwan would continue under capitalism. It is argued that Beijing has a strong interest in making sure that the formula works in Hong Kong if it is to have a chance of persuading Taiwan to reunite peacefully with the motherland under a similar arrangement.

Why should one expect Beijing's leaders to live up to promises for Hong Kong when it doesn't respect autonomy for Tibet?

In a way, it is comparing apples and oranges. The Chinese Constitution provides limited autonomy for ethnic minorities in areas of language and culture. The people of Hong Kong, however, are culturally no different from other mainland Chinese. The only differences lie in their having grown up in a foreign colony. None of the so-called autonomous provinces or counties in China have anything approaching the autonomy promised Hong Kong.

After 1997, Hong Kong will have its own constitution, its own legal system based on English common law, its separate currency linked to the US dollar, its own passport, and individual membership in international organizations such as the World Trade Organization (not even China is a member yet). It can root for its own team in the Olympic Games and has separate treaties regarding airline routes, investment, and other matters. No one has to pay Chinese taxes, and Beijing promises not to touch Hong Kong's huge foreign-currency reserves.

What is the mood in Hong Kong on the eve of the handover?

Surprisingly upbeat, considering that a few years ago many people would have predicted a city now in the terminal stages of panic, thousands of people clamoring to get out, property prices crashing, and the stock market in a free fall. In fact, the economy is booming, and property and equities markets are verging on speculative levels. For several years the Hong Kong Transition Project at the local Baptist College has been tracking public opinion. Its latest survey in February found 62 percent of the respondents expressing confidence in the future. Of course, this confidence is to a large degree related to the strong performance of the economy.

What happens on the night of June 30-July 1?

The festivities get under way at sunset on June 30 when the British, with Prince Charles in attendance, hold their own farewell, featuring the Royal Marine and other British military bands. The festivities move to a modernistic annex of the Hong Kong Visitors and Convention Center at Victoria Harbor, where there will be a Western-style banquet for about 4,000 invited guests (including United States Secretary of State Madeleine Albright), followed shortly before midnight by the lowering of the British and Hong Kong colonial flags and the raising of the Chinese flag and the new flag of the Special Administrative Region. Then Prince Charles and Gov. Chris Patten will sail away on the Britannia, the royal yacht.

Shortly before midnight China's president, Jiang Zemin, and Premier Li Peng will cross into Hong Kong and be driven to the convention center to attend the ceremony and to administer the oath of office to the new chief executive, Tung Chee Hwa, and the so-called provisional legislature, which replaces the elected one. Many Western leaders may boycott the swearing-in, because of opposition to the provisional legislature.

What are the personal choices some Hong Kongers have made in preparation for the handover?

Over the years many have emigrated to obtain foreign citizenship as insurance against things going wrong. Nearly half of the population also has the option of leaving, because they have relatives abroad who could act as sponsors. About half of the companies on the stock exchange have moved their incorporation abroad to guard against nationalization.

Future

Will Hong Kong lose all its freedoms after July 1?

The answer is a cautious no.

Certain recent actions have caused concern, more perhaps abroad than in Hong Kong. Two ordinances, liberalized by the British authorities in 1992 and 1995, are being restored to their previous forms. One prohibits local groups from forming ties with foreign political organizations. The other requires organizers of political demonstrations to obtain a police permit before staging a public demonstration.

How strictly the latter will be enforced remains to be seen. They probably reflect Beijing's anxiety that Hong Kong not be turned into a haven for foreign intrigue or a base from which to subvert Communist Party authority on the Chinese mainland.

Will people be able to worship freely after 1997?

China's laws regulating religion, such as the requirement that churches register with the government's Religious Affairs Bureau, are not supposed to apply in Hong Kong. Local congregations will also be allowed to maintain connections with overseas branches. But those Christians who actively support the so-called "underground" churches in China, or whose moral convictions prompt them to take an active interest in things like championing workers' rights in China, might have trouble.

Does the change of sovereignty mean the end of democracy?

Because of a strong disagreement over the composition of the legislature that was elected in 1995, China decided to disband the legislature and replace it with an appointed "provisional legislature." This legislature is meant to be temporary and will in turn be supplanted, probably in 1998, with another assembly with a strong elective element to it. Hong Kong's post-1997 charter, the Basic Law, holds out the promise that the democratic element will be increased in stages.

After 50 years, what?

Nobody knows for certain. The Joint Declaration returning the enclave to China simply stated that Hong Kong would enjoy its capitalist system and existing way of life for 50 years, without stating specifically what might come afterward.

The assumption here is that over 50 years, the systems in Hong Kong and China will converge, so that a half century later the question would simply not arise.

Some key facts:

* Hong Kong's 415 square miles - an area slightly smaller than Los Angeles - is home to 6.4 million people, or 15,421 people per square mile.

* It is also home to the world's freest and most service-oriented economy, with the fourth-largest gold bullion market, the fifth-largest banking center, and the seventh-largest stock market. Major industries are clothing, plastics, computers, watches, and clocks.

* Most people speak Cantonese, the dialect of southern China, and many speak English. The mainland's national language is Mandarin.

* The per capita gross domestic product is $26,645. Ten percent of the people live in poverty.

* It has world's busiest container port, busiest cargo airport, highest number of vehicles per mile of road, and the highest number of newspapers per person. More than half of Hong Kong's university-aged students study abroad.

* Some 900 US corporations have invested a total of $8.5 billion in Hong Kong. Thirty percent of the port traffic is bound for the US.

* After the return of Hong Kong, Britain's remaining holdings will be Anguilla,Gibraltar, Bermuda, British Virgin Islands, Cayman Islands, Falkland Islands, British Antarctic Territory, Pitcairn Islands, St. Helena, Ascension, Tristan da Cunha, South Georgia, South Sandwich Islands, British Indian Ocean Territory, Montserrat, and Turks and Caicos Islands.

Sources: Hong Kong Economic and Development Council; Far Eastern Economic Review; United Nations; World Bank