The typical history of Hong Kong begins around 1840. The previous year had seen the outbreak of what has since become known as the first Opium War between China's Qing dynasty (1644–1911) and Britain. Although prompted by the highly-exploitative opium trade, the conflict was also about wider issues of diplomatic status and representation and the management of trade. British gunboats prevailed against a weak Qing counterpart, and during the conflict British forces occupied the small island of Hong Kong at the mouth of the Pearl River which led inland to the southern city of Canton (today known as Guangzhou), planting their flag in Hong Kong in January 1841. The Treaty of Nanking which ended the first Opium War in 1842 – the first of the so-called “unequal treaties” – included provision for the Qing to cede Hong Kong to the British in perpetuity.

This initial imperial outpost was expanded in 1860 after the second Opium War by the ceding of the Kowloon peninsula, only 20 square kilometres of land which sat across the deep natural harbour from Hong Kong island. At the end of the nineteenth century, a wider scramble among western powers for concessions from the Qing saw Britain expand its colony further, with the addition of land to the north of the Kowloon peninsula and some 230 outlying islands. At over 930 square kilometres these New Territories constitute the vast majority of the 1,100 square kilometres of Hong Kong as a whole (Hong Kong's boundaries today also encompass 1,650 square kilometres of sea). Under the terms of the Convention of Peking of 1898, the New Territories were not ceded, but leased to Britain for a period of 99 years, and only occupied after brief resistance from the indigenous inhabitants of the area was overcome. With a Royal Order in Council stipulating British rule until 30 June 1997, the future “appointment with China” was set.

In contemporary China, the year 1840 has taken on a significance beyond its direct relevance to Hong Kong. This is the year when, in the writing of Chinese history, “modern” Chinese history begins. It is a much-cited date in official Chinese speeches and publications, and its significance for Chinese nationalists (including in the Communist Party) has been as a marker of the start of the “century of humiliation”, China's subjugation to western powers.

In 1997, some 156 years after being taken as part of the spoils of the first Sino-British Opium War, the British colony of Hong Kong was handed over to the People's Republic of China (PRC). What seemed like the closing of the final chapter of the British Empire sparked attention from around the world. For the Chinese leadership and much of the population this was symbolic of their country's gradual return to its historical position as a major power. But for Hong Kong and its people, a somewhat uncertain future lay ahead.

The “handover” followed more than 15 years of Sino-British negotiations, a process which had resulted in commitments that Hong Kong would continue to enjoy the main features of its existing system under Chinese sovereignty. This was the “one country, two systems” framework under which Hong Kong was established as the PRC's first Special Administrative Region (SAR) on 1 July 1997.

After the handover, global interest in Hong Kong waned. That changed in the autumn of 2014, when Hong Kong's “Occupy” movement erupted, with protestors camped out on the streets of Hong Kong's central business district for 79 days, amidst intense debates about changes to the way the city's leader would be selected. Massive protests in June 2019 and their aftermath have again cast attention on developments in the city. Hong Kong's politics and its future have returned to the spotlight.

Growing interest in Hong Kong has not just been fuelled by protests. Since 1997 the rise of China has proceeded apace as its economy overtook that of Japan in 2010 to become second in size only to the United States. The extent and pace of this rise and China's integration into the global economy had not been fully expected back in 1997 and has prompted growing debate and uncertainty about the intentions of the Chinese leadership and the impact on the rest of the world of China as a major power. Hong Kong's experience offers some insights into the consequences of this new Chinese power and influence. For China watchers and policy makers, the past few years have seen Hong Kong return to the agenda in discussions about China's global future, even more so in 2019 and 2020.

So far this account of Hong Kong and its politics since 1997 has focused on discussion of events in Hong Kong, but with the argument that these reflect a wider set of developments at the global scale, and that by looking at change in China and globally we are better able to understand developments in Hong Kong. Hong Kong's politics feature many of the characteristics of politics elsewhere, from polarization to populism, while Hong Kong's economy can only be fully understood by taking a global perspective.

This chapter examines more specific international aspects of the Hong Kong SAR. First, it looks at Hong Kong as an international actor, at the space and scope it has to engage on the international stage, and what this means for the SAR's development. This leads into a discussion of developments in Hong Kong from the perspective of those outside Hong Kong. In particular, it examines the policy approaches to the SAR from Hong Kong's former colonial master, the United Kingdom, with additional comment on the approaches of the United States and European Union. The chapter concludes with a more policy-oriented discussion of some of the ways in which these approaches might deal (or might have dealt) more effectively with the challenges that Hong Kong politics presents to third countries.

Underpinning this analysis is the view that Hong Kong still matters internationally. As a business and finance centre it is important for the global economy, playing a particularly important role in flows of capital and information. It is one of the key places where the Chinese and global economies interact (although unlike at some points in the past it is no longer the only such place). Economically and culturally it is an important partner for many other economies, and has the potential to play a positive role in the context of rising geopolitical and geo-economic tensions. And as a broadly free and open society that is now part of China, it tells us something about the way that the Chinese leadership might deal with political difference.

The events of the autumn of 2014 catapulted Hong Kong back to international attention, over 17 years after the world's media had last flocked to the city for the handover ceremonies. The eruption of protests in Hong Kong's central business district and other spots around the SAR turned out not to be another of the many short-lived protests that Hong Kong had seen on a regular basis, but a 79-day “occupation” of streets which were more used to taxis, buses and cars than pedestrians and the tents of protestors.

This was the “Occupy” movement, dubbed by some of its supporters as the “umbrella revolution” or “umbrella movement” after the symbol adopted by protestors who had used umbrellas to ward off police pepper sprays early on in the demonstrations. Between the end of September and the middle of December there were standoffs between protestors and the police. Key arteries in the main business district were turned into impromptu campsites, which hosted mini lecture series, first aid points, rubbish collection and recycling, and a proliferation of political slogans. Wit and creativity, as well as obscenities – not uncommon characteristics of Cantonese language – featured in protesters’ slogans. Meanwhile, after the initial clashes and use of tear gas, a heavy police presence watched cautiously over developments, anxious on the most part to avoid more confrontation than necessary.

Around protesters and police, Hong Kong's business and financial elites and those who provided the daily services of the city's economy went about their usual business as best they were able, alert to possible developments on the streets. Occupy did not paralyze Hong Kong, and away from the protest areas, life was pretty much unaffected, with social media and local news bulletins providing regular updates from the protest frontline.

But this was an unprecedented time in Hong Kong, and one which would prove to be a turning point in the city's politics.

The immediate catalysts for these protests was the thorny question of political and constitutional reform, this time focused on the question of how the chief executive should be chosen in 2017 and beyond. But more lay behind the protests.

At the height of the protests in November 2019, seasoned Hong Kong watcher Richard Bush suggested that events sounded a “requiem” for Hong Kong. At the time it was tempting to agree. There seemed no prospect of “getting back to normal” or any obvious way out of a political impasse which had turned increasingly violent and become embedded in the escalating rivalry between the US and China. Since then, the politics have shifted yet again. In early 2020, the Covid-19 pandemic and a more restrictive approach from the police to public demonstrations dampened down street activism, as discussed in the previous chapter. Meanwhile, Beijing's more proactive stance became evident as the first half of 2020 unfolded, culminating in the passage of the national security law. Rather than a requiem, it seemed that China's leadership was looking for a restoration. At the end of all this, are we witnessing the long-prophesied demise of Hong Kong or its revival as China's global city?

These questions are particularly difficult to address given ongoing uncertainty on many fronts, including the implementation of the national security law, the trajectory of the Covid-19 pandemic, the impact of US presidential and congressional elections due in November 2020, and the wider prospects for China's relations with the US and other countries which have in the past enjoyed close ties with Hong Kong. But writing in the middle of 2020 it looks as if we are witnessing a significant turning point for Hong Kong that could bring with it a new politics and changes to a number of previous assumptions about the SAR. However unpredictable the future, the impact of this turning point is likely to be significant.

I explore these questions in this conclusion. The chapter first discusses the forces and the issues that will shape Hong Kong's future and how might they play out over the coming years. Then it addresses whether we are witnessing either the demise of the “one country, two systems” framework or the “end of Hong Kong” as we know it. Finally, I ask what visions of the future might be possible.

How successful has the handover settlement been? To address this question, we need to examine factors which have affected it and Hong Kong's development more widely, from those within Hong Kong to changes in China and the global environment. This chapter approaches this question chronologically and thematically, beginning with the early implementation of “one country, two systems”. It discusses a series of crises that Hong Kong faced, from the Asian financial crisis of 1997–8, to the double crises of 2003 when Hong Kong was hit by the SARS epidemic and saw massive protests against proposed national security legislation, and the global financial crisis of 2008 and its aftermath. Throughout this period, the difficult issue of political reform and the introduction of more democracy was never far from the surface. In Chapter 4, we shall pick up the story again by examining developments around the Occupy movement in more detail.

The scope for different interpretations of the handover settlement is relevant to any assessment of its implementation. For example, while many in Hong Kong have focused on the question of democratic development or the preservation of basic rights and freedoms as indicators of the success of “one country, two systems”, in Beijing the more important points have been to do with upholding national security and territorial integrity, or the implications of the rise of “anti-China sentiment” in Hong Kong. Although this chapter argues that much has been achieved in implementing the handover settlement, the political reality is a certain degree of dissatisfaction on all sides of the debates.

To start with the most basic elements of the handover settlement, China resumed the exercise of sovereignty over Hong Kong on 1 July 1997, and the UK continued to administer Hong Kong until that point. The Hong Kong SAR was established in accordance with the Chinese constitution, and the primary Chinese objective that Hong Kong's handover would signify a step forward in national reunification – taken further by the return of Macao to China from Portugal in 1999 – was achieved.

From June 2019 into 2020, Hong Kong was rocked by prolonged large-scale protests, which frequently descended into violent and chaotic clashes with police. These protests, and the responses to them, have exacerbated polarization and radicalism in Hong Kong politics. They have had multiple causes and deep roots in many of the developments discussed in the earlier chapters of this book, from diverging visions of Hong Kong's future to an increasingly difficult relationship between Hong Kong and Beijing, all in a context of increasingly polarized and populist global politics and a stark deterioration in US–China relations. In Hong Kong, the protests of 2019 saw consensus around “one country, two systems” fragmented further, and a significant minority express support for more revolutionary agendas, often fueled as much by hatred of Beijing as any positive vision for Hong Kong. The handover settlement has been tested further, possibly to destruction.

The protests came in the context of and partly as a result of growing political dysfunction in Hong Kong, with the legislature barely operating at times since 2016, a poor relationship between the executive and legislature, and increasingly polarized and fragmented politics. Insecurity about Hong Kong's relationship with the mainland added to the mix, as seen in the earlier debates over co-location of Hong Kong and mainland customs and immigration personnel at the high-speed rail terminus in West Kowloon, and the government's marketing of the Greater Bay Area as a foundation for Hong Kong's future economic development. But during this period the international politics of Hong Kong – China's global city – featured to a much greater degree than it did in the Occupy movement of 2014. This was fed by, and in turn fed, the growing strategic rivalry between the United States and China, and Washington's increasingly hostile approach towards China. Hong Kong's challenges during this period were deepened by being in the wrong geostrategic place at the wrong time.

This chapter outlines developments from the summer of 2019, beginning with the controversy over extradition which sparked the initial protests. It then discusses the nature of the protest movement, its goals and approaches, before moving on to consider perspectives from Beijing and the international angles to this highly controversial period.

Economic and social issues in Hong Kong have been important in shaping the way that the handover settlement was constructed and then implemented during the SAR's first two decades. Especially since the Occupy movement, politics and economics in Hong Kong have become increasingly intertwined in ways that are similar to those in many other societies, revealing a microcosm of the crises of globalization. This chapter discusses the developments in Hong Kong's economy since 1997.

Hong Kong's economy has always been shaped by and exposed to developments outside its own boundaries to a much greater extent than most other places. Those external factors have changed over time. The impact of developments in China has always been right at the top of the list, while the geography of broader global influences has changed to reflect wider geopolitical and geo-economic trends, from the paramount influence of the British empire in the first century of Hong Kong's existence as a colony, through Japanese aggression and the Second World War, followed by the steady growth of engagement with the US and other fast-growing Asian economies after the war.

But Hong Kong's economic development has been about more than engagement and interactions between different economies. As noted in the Introduction, 1978 was the point when the Chinese leadership under Deng Xiaoping embarked on “reform and opening up”, looking to attract foreign investment and know-how into the economy, build special economic zones as a base for exports, and engage proactively in foreign trade. It was perhaps something of a coincidence that this happened at the same time that the global economy was entering a new phase of globalization, marked in particular by a revolution in the way that production was organized. This had already begun in East Asia as Japan and the other newly-industrialized Asian economies had grown rapidly.

In other words, “China was ready to enter the world, and the global economy was ready to integrate China”. This process would reshape both China's economy and globalization itself, and provide the context for a new phase of development in the Hong Kong economy. As we saw in Chapter 1, with rising labour costs in Hong Kong, and the opportunity to invest in culturally-familiar territory across the border in Shenzhen, many Hong Kong manufacturing operations moved their production to Guangdong.

The writing of this book has been caught up in the rapid changes in Hong Kong's politics. The first edition was almost complete and ready to go to press in June 2019 when major protests erupted in Hong Kong. Thanks to the nimble work of Agenda Publishing, I was able to add a short Afterword to the first edition, covering events up to 17 June 2019, including the two most substantial and largely-peaceful protests on 9 and 16 June, as well as more violent scenes on 12 June. At the time, it looked as if the government's announcement on 15 June that it was suspending the extradition bill which was the catalyst for the protests meant that things might subside before too long. However, the protesters had the wind in their sails, and the events of mid-June turned out to be just the beginning of a long, hot summer and autumn of unrest in Hong Kong.

A little more than a year on, it seems to be tempting fate to try to finalize a second edition of this book. Much has changed over the past year, irrespective of the impact of the Covid-19 pandemic which has dominated many people's attention in 2020. In Hong Kong politics, the year which began with the June 2019 protests culminated in the controversial passage in Beijing of a national security law for Hong Kong on 30 June 2020, the eve of the twenty-third anniversary of Hong Kong's return to Chinese sovereignty.

This second edition contains a new Chapter 6 covering the last year in detail to the beginning of August 2020; too much has happened to include everything, and these events are recent and highly contested, but the chapter reflects my best efforts to make sensible judgements about them. This is followed by a new Conclusion which attempts another look at the future of Hong Kong. I have kept other changes to the first edition to a minimum.

Many of the underlying trends I identified in the first edition remain relevant today in the way that local, national and global forces are intertwined in shaping the politics of China's global city.