25 years ago, Hong Kong returned to Chinese rule. The UK returned the region to China, which in turn pledged to preserve existing rights and freedoms. The formula known as “one country, two systems” was central to the agreement between Margaret Thatcher and Deng Xiaoping.
Arrangement 1-2 was reflected in the Hong Kong Basic Law: “The socialist system and policies shall not be practiced in the Hong Kong Special Administrative Region, and the capitalist system and way of life shall remain unchanged for 50 years” (Article 5th). However, Article 1 leaves no doubt: “Hong Kong is an inalienable part of China”.
Hong Kong was occupied by the British from 1841, in the First Opium War. “Unequal and unfair treaties”, as the Chinese say, provided the basis for the British presence in the region for more than 150 years. The area occupied was expanded twice, the last time there was a lease of Chinese territories for 99 years. This rent expired in 1997, the year that marked the end of the British Empire’s presence in China.
Over the past quarter century, Hong Kong has served as a bridge between China and the rest of the world. It facilitated Chinese integration into the economy and especially into the international financial market. In 1997, Hong Kong accounted for 18.4% of Chinese GDP.
Many anticipated that by 2047, at the end of 50 years of the 1-2 formula, China would adopt a political model more palatable to the West — and relations with Hong Kong would contribute to that. In the mid-1990s, it was believed that the economic opening underway in that decade would lead to political opening; there was a certain triumphalism associated with the idea that the model of liberal democracies would be the natural destiny of humanity.
However, the Hong Kong of 2022, midway on the 50-year trajectory, is more like mainland China than many imagined, or wanted, at the time of the handover.
In 2019, large pro-democracy demonstrations took to the streets of Hong Kong for months, strengthening pro-independence voices, albeit minority ones. The protests tested the patience of Beijing authorities, focused on Article 1 of the Basic Law: one country, not two.
The answer came, not with tanks, but with a National Security Act that took the oxygen out of the demonstrations. Newspapers closed, thousands of protesters were arrested, and control over Hong Kong tightened. Certainly something very different from what Thatcher had expected.
Beijing may, at least for now, have solved its problems with Hong Kong — but the impacts were also felt far away. With the National Security Act, the credibility of the 1-2 model was undermined in Taiwan. An arrangement that, in the view of some, could serve as a basis for peaceful reunification with the so-called rebel province, was once and for all unfeasible. The new modus vivendi between Beijing and Hong Kong worries Taiwanese.
Furthermore, over time, Hong Kong’s economic weight has been eclipsed by Chinese growth. From 18.4% in 1997, the region accounted for 2.3% of China’s GDP in 2020. In fact, Shenzhen City’s GDP surpassed that of Hong Kong in 2018. Hong Kong’s close economic ties to mainland China naturally have political implications. They made many businessmen, for example, support Beijing’s intervention to contain the 2019 protests.
Twenty-five years after the “one country, two systems” experiment in Hong Kong, and 25 years after its end, the Chinese political model and that of the former British colony are closer than ever. But in the opposite way to what many imagined.
