Photographer: Billy H.C. Kwok/Bloomberg

How Chinese Rule Has Changed Hong Kong Since 1997

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On July 1, 1997, the Chinese national flag was raised over Hong Kong for the first time, ending 156 years of British rule and beginning an unusual experiment in democracy by Beijing. As President Xi Jinping visits the city for the 20th anniversary, he’s facing new questions about China’s commitment to the handover deal and human rights in general.

1. Why is 20 years a big deal?

Every year the anniversary generates emotional responses from both celebrants of China’s post-colonial resurgence and protesters worried about Hong Kong’s future as a beacon of capitalism, free speech and the rule of law. This year carries special significance because China only promised to leave Hong Kong’s “high degree of autonomy” intact for 50 years. In 2022, when the city’s incoming chief executive Carrie Lam’s term expires, that promise will have more days behind it than ahead of it.

2. What will happen July 1?

Xi is making his first visit to Hong Kong since taking power in 2012. It’s the first presidential inspection tour since pro-democracy protests shut down parts of the city in 2014 and helped spawn a more confrontational independence movement. Thousands of police have been training for months to prepare for a huge annual protest march and any flare-ups of civil disobedience.

3. Why is Hong Kong so important?

Hong Kong’s status as a top financial center rests in part upon its reputation as a safe place to put your people and investments. More broadly, the city shows how well Beijing adheres to agreements such as the Sino-British Joint Declaration, which in 1984 set out the terms of Hong Kong’s return. that document enshrines principles like democracy and independent courts that are hard to reconcile with China’s one-party system.

4. What exactly was Hong Kong promised?

Hong Kong’s charter, known as the Basic Law, preserves British common law and other colonial tenets such as property rights, free speech and an independent judiciary under a framework called “one country, two systems.” The biggest fights have focused on a provision that says the city’s chief executive must eventually be chosen by “universal suffrage.” 

5. Has China kept its side of the bargain?

Two decades on, Hong Kong’s leader is still chosen by a committee of 1,200 political insiders. China’s most significant attempt to enact the universal suffrage clause failed in the legislature in 2015 after months of protests by democracy advocates, who argued the take-it-or-leave-it proposal would ensure only proven Beijing loyalists became candidates.

6. How autonomous is Hong Kong really?

Zhang Dejiang, the Communist Party’s No. 3 official, said in May that China’s relationship with Hong Kong was based on a “delegation of power, not power-sharing” and warned the city against confronting Beijing. China has shown an increasing willingness to assert its authority in Hong Kong, especially over what it views as threats to national security. Last year, China told the U.K. government to “stop interfering” after it criticized the abduction of Hong Kong booksellers critical of Communist Party leaders. In November, China’s top legislative body made the unprecedented decision to intervene in a Hong Kong court case and instruct judges on how to interpret local law. The move led to the ouster of two pro-independence lawmakers and paved the way for similar actions against eight more.

7. What’s the impact on the local economy?

While foreign businesses say they’re watching for any erosion to Hong Kong’s rule of law, the city routinely ranks among the world’s top business destinations. Still, China’s efforts to boost economic ties with Hong Kong are putting pressure on locals and foreigners alike, driving up property prices to world-beating levels and crowding out Wall Street banks from the local initial-public-offering market.

8. Where does Hong Kong go from here?

Just 30 years before China’s guarantees expire, there’s little prospect of a political breakthrough between Hong Kong’s feuding factions. A continued hiatus may begin to weigh on long-term financial decisions as the 2047 deadline approaches. While Lam, the next chief executive, has promised to heal divisions, she faces pressure from Beijing to take a hard line and resolve lingering political debates. In April, the mainland’s top legal affairs official in Hong Kong warned that the government would consider scrapping “one country, two systems” if the concept became a threat to China.

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