Forget Hong Kong, think China?

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At midnight on 30th June 1997 the largest remaining portion of the British Empire was transferred to China together with a (reverse) transfer fee of some 45 billion US dollars in reserves

In front of the world's television cameras the Union Jack was lowered and the yellow-starred red flag of the People's Republic of China took its place.

End of Hong Kong story? Surely not. Another flag was run up at the same time. It was the pink Bauhinia tree-orchid on a gaudy red background which is the new emblem of this extraordinary territory. It is a flag which shouts for attention. Here we are, it says, just six million people living in only 400 square miles of unproductive mountainous land, one of the largest trading economies in the world. You shall not ignore us.

That message is aimed as much at China as at the rest of the world. Hong Kong may have returned to Chinese sovereignty, but it is still a separate enclave, protected by an internationally recognised fifty-year guarantee of near full autonomy as a Special Administrative Region of China and by a triple fence which holds back a potential flood of economically damaging refugees from its gigantic neighbour. Hong Kong has its own laws, its own currency, its own way of life, its own vibrant identity, and it is not going to be quietly absorbed into non-existence if it can help it.

When Britain created and ruled Hong Kong it fostered a colony which failed to conform to the colonial mould. Its Chinese people would not accept inferior status, making for a curious vertically bipartite society in which its nominal rulers were eyeball to eyeball with the nominally ruled in a mutually disdainful yet mutually beneficial relationship. And something of the same ilk characterised the relationship between Hong Kong and the home government in London, whose dictates were not infrequently ignored in a Nelsonian 'I see no signal' fashion by independent-minded Governors.

The people of Hong Kong have learned how to survive and prosper despite adverse circumstances, and over more than 150 years they have worked out techniques for manipulating their British rulers and profiting from them. Is it likely that such a people will fall easy victim to any evil machinations (of which there are few signs) by their new rulers? They are more likely to devise ways of manipulating Beijing.

Hong Kong is geographically and morally part of China (no more part of Britain than the Isle of Wight is part of China) but it has grown to be culturally and economically separate from the Mainland, and things work differently in the two places. Transfer from Britain to China could not dispel these differences overnight, and it is arguable that it is not in China or Hong Kong's interest for too great a unity to come about - would it not be better for both if the two systems co-existed and learned from each other while competing?