At the stroke of midnight on July 1, 1997 in Hong Kong, the Crown Colony of the British Empire was handed back to the Chinese government in a smooth and precise ceremony, ending 156 years of British reign. For one-and-a-half centuries, Colonial rule played a fundamental part in shaping the development of Hong Kong and its way of life. But on this auspicious night, the fears of Hong Kong’s 6.5 million citizens ran high.

What would become of the famed capitalist system installed by the British Empire? To the relief of the vast majority of Hong Kongers, the system today is still intact and stronger than ever, ranking it as the freest market in the world. The story of how Hong Kong retained its capitalist market while becoming integrated into China begs the question as to how the Hong Kong government functions and what its role is vis-à-vis mainland China in governing the city.

What changed after the handover? Not a lot. As a result of the 50 year agreement between China and the United Kingdom, China has agreed not to interfere with the economic and political systems of Hong Kong for at least 50 years after the handover. China has adhered to the deal, and as a result Hong Kong has remained mostly unchanged. The only difference has been the election process.

As a tourist you might be unaware of the political system that governs Hong Kong. However, to truly understand Hong Kong, it’s essential to find out how such a behemoth of a city runs itself. The government uses a unique system that combines elements of democracy and direct rule. The basic structure of the government is composed of a Chief Executive and the Legislative Council. The Chief Executive, who, together with his appointed ministers heads up the administrative civil service akin to the executive branch, is picked by a committee comprised of delegates from Hong Kong whose own selections are tacitly approved by Beijing. The current Chief Executive, Sir Donald Tsang is a career civil servant, who is referred to by Hong Kongers as “Bow Tie Tsang” for always wearing a bow tie, actively pursues his hobby of keeping koi fish and has built a $300,000 koi pond to house his prized collection.

The Legislative Council is comprised of 60 elected members. Half are elected directly by the people in their own districts, while the other half represent key business and professional sectors in Hong Kong and are elected by members of the associations representing these sectors. Lawmaking power rests with the Legislative Council, except for specific constitutional matters stipulated in the basic law, in which case it would be referred back to Beijing.

Hong Kong also retains an autonomous financial system, its own currency and even its own foreign exchange reserves. Hence the “two systems” aspect of the arrangement is indeed distinctive. As to the “one country” part of the system, China has sovereignty over Hong Kong, and provides it with a defensive force that is largely invisible. Fortunately, this arrangement has worked well over the last 13 years.

While China will play an increasingly important role in shaping Hong Kong’s future, at least until 2047, when the agreement expires, or perhaps even beyond, Hong Kong should continue to retain much of its distinctive colonial history and culture, thanks to the “one country, two systems” model.

Visitor’s Tips

As a visitor to Hong Kong, you can experience firsthand the architecture and beauty of it government buildings. The Legislative Council, located next to the Cenotaph War Memorial in Central, was once used as the Supreme Court of Hong Kong; this explains why the architecture of the building resembles that of a classical style used by the British. Visiting the building now is a rare opportunity as this is the last year it will house the Legislative Council, which will be moved to a site nearby in 2011.

The Government House, located along Upper Albert Road, is a neo-classical Japanese work of beauty. Created during the Japanese occupation of Hong Kong, the Government House is the current residence of the Chief Executive of Hong Kong, Donald Tsang. These two destinations are a must-see for any visitor who desires to see classical architecture at its best in Hong Kong.

Another stop for anyone interested in the “one country, two systems” model is Grand Bauhinia Square next to the Hong Kong Convention and Exhibition Centre, site of the 1997 Handover Ceremony. The sculpture of the golden bauhinia in the middle of the square symbolises the reunification of Hong Kong after the handover. A flag raising ceremony takes place here every morning at 7.50 am.