10 years after handover, Hong Kong booming

updated 12:33 a.m. ET July 1, 2007

HONG KONG - Many were gloomy about Hong Kong's future 10 years ago when the British colony of dazzling skyscrapers and gung-ho capitalists returned to the communist Chinese motherland.

There were fears Chinese troops would be goose-stepping down the streets, muzzling any whisper of political dissent. Masses of peasants would stampede across the border, filling the city with beggars and thieves. And the most talented Hong Kongers would become "yacht people," fleeing to Australia, Canada, America and other places welcoming their business savvy, workaholic ways and cash.

Fortune magazine's headline, two years before the British flag came down, proclaimed "The Death of Hong Kong."

Ten years later, the soldiers are here, but are rarely seen in uniform on the streets. Mainland Chinese are pouring in, but many are big-spending tourists buying Rolex watches and shark-fin soup. Many rich Hong Kongers are back, resettled in a booming city, happy that their fears have proved groundless.

Queen's statue still stands
Queen Victoria's statue still stands in the middle of town, in a park where thousands of protesters rally each year to denounce China's undemocratic system and remember the Chinese killed in the crackdown on pro-democracy demonstrators at Tiananmen Square in Beijing — the 1989 bloodbath that spurred an exodus of Hong Kong Chinese fearful that they would one day face a similar fate.

But even as memories of Tiananmen fade, not all is well in Hong Kong. Media critics say some formerly outspoken newspapers now pull their punches to avoid angering China. Hong Kong is far from fully democratic. Its laws guarantee Beijing's candidates a majority in its partially elected legislature, leaving the popular pro-democracy parties permanently in the minority. The political and legal system is highly vulnerable to meddling by the Communist overlords in Beijing.

"I don't think Beijing is seriously ready for democracy in Hong Kong," said Steve Tsang, an expert on Chinese politics at Oxford University in Britain.

When Britain's 156-year rule ended, in a lavish ceremony on the rainy midnight of June 30-July 1, 1997, the deal was that the city could keep its capitalist ways and civil liberties for 50 years.

One country, two systems
The formula called "one country, two systems" promised a wide degree of autonomy, and in many ways, Hong Kong still acts and feels like a country separate from China. It has its own currency and telephone country code. Its legal system remains British and its judges wear wigs.

And the election system, however limited, is far freer than anything in China. Hong Kong's leader, or chief executive, is the highly popular Donald Tsang, a policeman's son steeped in the British civil service tradition and knighted in the final days of British rule.

So far, the former colonial masters say things are going jolly well.

"Over the past 10 years, there have been some very bumpy moments — politically and economically," British Foreign Secretary Margaret Beckett said in a speech during a recent visit.

Hong Kong: 10 Years Later A special section marking the 10th anniversary in 2007 of Hong Kong's handover to mainland China. ___________________________________ Anniversary greeted with pomp and protests 10 years after handover, Hong Kong booming Some regret fleeing Hong Kong Thatcher: Fears on Hong Kong 'groundless' Far East fanatic? Take our Hong Kong quiz Photo timeline: Hong Kong's turbulent past SEE FULL CONTENTS OF SPECIAL SECTION

"But some of the more dire predictions I remember so vividly from 1997 have not come true," she added. "One country, two systems has worked."

Former British Prime Minister Margaret Thatcher, whose government negotiated the handover agreement 13 years before it came into force, recently told the BBC that the worries about Hong Kong's future "have largely proved groundless."

Just a dot on massive China's southern coast, Hong Kong — islands and mainland — consists of 6.9 million people crammed into an area the size of Nashville, Tenn.

It was a sparsely inhabited clump of rocks with a spectacular deep-water harbor when the opium-pushing British seized it in 1841, to the annoyance of their then-foreign secretary, Lord Palmerston, who dismissed the new possession as just a commercially worthless "barren island with barely a house upon it."

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