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Last Updated: Thursday, 21 June 2007, 16:05 GMT 17:05 UK
Hong Kong's decade under China's flag
In the first of a series of features, the BBC's Samanthi Dissanayake looks at how Hong Kong has changed, 10 years after it was handed back to China by the British.

The skies opened and poured with rain when China finally regained possession of Britain's last great imperial outpost at midnight on 30 June 1997.

Hong Kong landscape (file photo)
Hong Kong's success is largely thanks to its capitalist economy

"I was unsure, not scared, unsure," said 87-year-old Tang from his small village in Hong Kong's New Territories, close to the border with China.

Uncertainty about the future was only natural when a socialist state one billion-strong took on what was arguably the world's most successful experiment in capitalism.

In the decade since the handover, Hong Kong has weathered the slump of the Asian financial crisis, the premature resignation of an unpopular chief executive and the Sars outbreak.

Little change

But what is striking when talking to people across the territory is how little they believe has fundamentally changed.

"No difference, no difference," said Tang, who tends the ancestral hall of his family clan.

Tse Lin Kwai
Before, we were a colony governed by others. Now I can say I love my mother country, my homeland
Tse Lin Kwai

"I don't feel it has changed," said Tse Lin Kwai, a taxi driver.

This is largely because Hong Kong is governed by the principle of "one country, two systems", whereby China has agreed to preserve its way of life for 50 years after the handover.

Hong Kong's mini-constitution, the Basic Law, provides for the protection of citizens' rights and the development of democracy.

Hong Kong still ranks as the freest economy in the world, according to the Index for Economic Freedom, and has done for the past 13 years.

Personal freedoms remain uncompromised. Moreover, integration with China has allowed some to express an enhanced Chinese identity.

"Before, we were a colony governed by others. Now I can say I love my mother country, my homeland," Ms Tse said.

Feeling marginalised

Her words belie the complex relationship that has evolved between China and the people of Hong Kong. Key to understanding change in Hong Kong is understanding the change across the border.

In the last decade, China has developed at breakneck speed. Indeed, as Hong Kong suffered during the downturn of 2003, China came to its assistance with a scheme giving Hong Kong goods free access to China's markets.

Growth in tourism from the mainland has been exponential, and cross-border traffic has made Lo Wu, Hong Kong's main border control point with China, the busiest in the world.

I don't feel the difference between Hong Kong and China
Cheng
Driver

On the train to Lo Wu, passengers' growing identification with China is twinned with a fear of the rising economic might of China, which some believe could marginalise Hong Kong.

"I don't feel the difference between Hong Kong and China," said Cheng, a tour bus driver who was visiting family in China.

"But I feel the threat from Shanghai which has flown up so high so quickly," he added.

The relationship between China and Hong Kong is misunderstood, according to Tuan Chyau, an economist at the Chinese University of Hong Kong.

HAVE YOUR SAY
Hong Kong has made much more progress in the last 10 years
Shahid Shahid, Chicago

As the two economies integrate, certain shifts are inevitable, he says.

"Hong Kong has become the service provider as its manufacturing has moved to China. Shenzhen will catch up with Hong Kong in terms of container shipments. But all these cities are growing. Ranking is unimportant as long as Hong Kong can keep good growth."

Nevertheless, the comparison will hit home hard after a decade in which wages in Hong Kong fell and the gap between rich and poor increased.

This gap is now one of the widest in the world.

"Hong Kongers"

Every day before the news, Hong Kong television broadcasts Chinese national songs. Many people mentioned this to me with some bemusement.

A vibrant sense of local identity has remained.

People talk about their love of Cantonese opera, their pride in Hong Kong's home-grown film industry and their fears for the fate of the Cantonese language in Hong Kong when Mandarin is of increasing significance.

Hong Kong was the tiny flickering light of internationalism on [China's] south coast. Now the whole country is lit
Prof Michael de Golyer
Hong Kong Baptist University

Surveys show that people tend to identify more strongly with Hong Kong than with China, although the gap has narrowed in recent years.

One defining moment was July 2003, when hundreds of thousands protested against a controversial anti-subversion law.

Hong Kong - and to a lesser extent Macau, which was handed back from Portuguese rule to China in 1999 - hosts a visible political opposition, in contrast to much of the rest of Chinese soil.

"The challenge to China is how the central government manages a growing and assertive political culture in Hong Kong and increasingly in Macau," said political analyst Sonny Lo.

"This will have important implications for China's political reform in the coming decade."

China's menace

Law Yuk Kai of the Hong Kong Human Rights Monitor acknowledges that peoples' rights have largely remained in place, but points to a number of instances when the Standing Committee of China's National People's Congress has weighed in and interpreted the Basic Law.

"As soon as Hong Kong was handed over, there was a rolling back of civil liberties legislation," he said.

Tang
Tang is one of many who have seen little overt change

In 2004, universal suffrage for the 2007 chief executive election was ruled out.

And while Hong Kong enjoys relatively high levels of press freedom, there are disturbing signs.

In a recent survey for the Hong Kong Journalists Association, 30% of the 506 journalists questioned admitted they practiced self-censorship.

Many point out that the change in Hong Kong is less significant than the change in China - a country that only opened up to the world 30 years ago.

China knows that Hong Kong's success depends on its rule of law and open markets.

"When we asked people if they expected China to become more like Hong Kong 10 years ago, there were people who said it would. They turned out to be right. Many expected it to go the other way," said Professor Michael de Golyer, of the Hong Kong Baptist University.

"Hong Kong was the tiny flickering light of internationalism on the south coast. Now the whole country is lit."




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