AS Hong Kong today marks the tenth anniversary of its re-incorporation into the state of China a remarkable political phenomenon is to be observed. Ten years ago the expectation even of optimists was that Hong Kong would have to change its capitalist character somewhat under pressure from Beijing. In fact the reverse has almost happened: Hong Kong remains much as it was, and perhaps even more so, while China itself has changed in a way that inches it closer to the values that have sustained Hong Kong's success.

Beijing's readiness ten years ago to adopt a philosophy of “one country, two systems” in order to accommodate Hong Kong's return to the fold has proved a remarkably flexible and effective formula, although the acceptance of Hong Kong's “system” has been honoured more in economic matters than in political and constitutional matters. The commitment that Hong Kong politicians would be able to run their own territory has not been honoured; Beijing still calls the shots. Nonetheless, as the rulers of China look at the undeniable and growing ambition of their own millions to share the kind of life their counterparts in Hong Kong enjoy it is surely more likely that they will see Hong Kong as a miniature model of China's own future. The effect that next year's Olympics in Beijing will have on this process of change is likely to be significant. There will still be a delicate balance to be found between economic and political freedom, and that will take time.


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