Kerry Brown
Associate Fellow, Asia Programme
Kerry Brown on ‘one country, two systems’, the UK’s diminishing influence and the territory’s future, 20 years after the handover.
Hong Kong and Chinese flags hang in preparation for President Xi Jinping's visit. Photo: Getty Images.Hong Kong and Chinese flags hang in preparation for President Xi Jinping's visit. Photo: Getty Images.

1 July marks the 20th anniversary of the transfer of Hong Kong’s sovereignty from Britain to China. Kerry Brown speaks with Jason Naselli about what the future holds for the territory.

How sustainable is the ‘one country, two systems’ framework? Will the arrangement last the full 50 years (until 2047) as originally envisioned?

It is questionable whether the arrangement that exists today was the one envisioned in 1997 when the handover happened. It was always a very abstract, flexible system, granting Hong Kong a high degree of autonomy, meaning it could maintain its capitalist system. Of course, in the lead up to 1997 all these things were broadly seen as being in Beijing's interests to preserve.

But these days, the one thing that few said in 1997 has come to pass – the People's Republic has maintained one-party rule as a political system, but become one of the world's great economies. It has been so far a huge success.

Hong Kong therefore has diminished in importance over the years to the point that maintaining at least some semblance of one country, two systems is almost like an act of charity. It has been nibbled at, compromised and seems to grow weaker by the day. Most in Hong Kong would say there is a system: one country, one system. That's the deal.

The central government’s deepening involvement in the territory’s politics is a subject of growing controversy in Hong Kong. Does the Chinese government need to alter its approach?

Not particularly. It doesn't want to see Hong Kong fail as an economy. That doesn't suit its interests at all. But nor does it want a truculent, disobedient polity that is meant to be part of its sovereign territory.

So it has increasingly set political parameters. Hong Kong can have its unique system – as long as it is obedient. And on the whole, that is the deal that all of the city's chief executives until now have internally understood perfectly.

As part of the 1997 handover, the UK has ‘a continuing moral and political obligation’ to Hong Kong. How will this relationship play out as Brexit shifts Britain’s place in the world?

The Foreign Office offers a six-monthly report to Parliament, updating on how the handover deal is going. As the years go on, however, it becomes increasingly illusive how the UK has any real locus to say much about the situation on Hong Kong. It did say, rightly, that the detainment of one of the booksellers taken in in 2015 was a violation of the treaty because he was British. This was the strongest wording that has ever appeared from an official British source. But with dependence on creating a new kind of relationship with China now foremost in people's minds because of Brexit and other economic pressures, it is not surprising that the priority increasingly lies elsewhere.

With direct management of Hong Kong gone, the UK was always going to be more and more irrelevant. That has happened. And in any case, relations with China have had to become more complex and multifaceted. Hong Kong was always the tail wagging the dog for the UK relations with China. Now there has been a rebalancing, the calculation always has to be how much unilaterally supporting Hong Kong will damage relations with Beijing. This has become an increasingly asymmetrical question: in a playoff, preserving links with Beijing will always prevail. That's just the reality of the new world we are seeing come into being.

Hong Kong has played an important financial role for China over the past 20 years, but where will it fit as markets and financial institutions on the mainland mature?

It maintains is role as a major RMB hub, and as a finance centre. But it is surrounded by competition. Singapore, and Sydney, and other places in the region have RMB deals. Shanghai and Tianjin aspire to be portals for entry to the domestic Chinese market. Hong Kong every day has to think of new ways to maintain its relevance and beat back competition. So far, it has done well. But this is an issue it can never be complacent about.

What has been the most significant change in Hong Kong society since 1997?

The rising cultural and linguistic influence of the mainland on Hong Kong. Hong Kong has maintained its difference – but it has had to change. It is clear that Hong Kong is now in the hands of Hong Kongese – they cannot rely on others to stick up for them now. The culture, identity and future of the territory are in their hands. In that sense, they have autonomy.

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