1997: past, present, and future converge

Rescission

Although Hong Kong housed one of the world's largest agglomerations of sophisticated trade, financial, and corporate management intermediaries and their producer services, its future rested on geopolitical events of the nineteenth century. Under the Treaty of Nanking (1842) that ended the Opium War, the British acquired Hong Kong in perpetuity, but no informed observer doubted that China eventually would demand that the British leave. They had taken Hong Kong, according to the Chinese, in an unequal treaty when China was weak, and its government did not recognize British rights to continued control. Paradoxically, the impetus for Hong Kong's return to China rested in the ticking clock of an obscure treaty from 1898 when Britain acquired the New Territories, an area north of the Kowloon Peninsula, from China; the lease terminated on July 1, 1997.

After 1949, the leaders of China's Communist Party kept Hong Kong secure as an international trade and financial center under British rule. That pragmatic decision gave China access to information and foreign exchange during its struggle to develop under socialist principles and the restrictions on economic ties to foreign countries. China would have gained little economically from taking control, and the political risk of confrontation with foreign powers must have outweighed considerations of pride.