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When Hong Kong transitioned from British to Chinese rule, Edmond Hui was a floor trader at the bustling stock exchange, witnessing the roaring growth of a city at the crossroads of the West and Asia.
Under a deal signed with Britain ahead of the 1997 handover, China promised Hong Kong could keep its capitalist system for 50 years, an arrangement that helped the city thrive as one of the world's top financial hubs.
Friday marks the halfway point of that experiment, with uncertainty clouding the economic future of Hong Kong -- a city reliant on an increasingly isolated China, struggling to shake off the reputational damage from political unrest and pandemic-induced border closures.
Hui, now the chief executive of a mid-tier stockbroker with nearly 300 employees, said post-handover markets have undergone a drastic shift, becoming more China-focused than ever.
"Before 1997, foreign capital propped up half of the market," he said. "After 1997, things changed gradually until the whole market was held up by Chinese capital."
China's meteoric rise in the past two decades yielded vast benefits for Hong Kong, which became the gateway for mainland firms to raise funds and for foreign businesses to access what is today the world's second-largest economy.
"Hong Kong was sort of a poster child of free trade and open markets," veteran pro-Beijing Hong Kong politician Regina Ip told AFP.
But the interlocking of its fate with China has also led to warnings about overreliance and complacency.
Chinese companies made up around 80 percent of the market capitalisation in Hong Kong's stock market this year, up from 16 percent in 1997.
And Chinese firms now account for seven of the top 10 holdings of the benchmark Hang Seng Index, which used to be anchored by homegrown brands such as Cathay Pacific and Television Broadcasts Limited.
Hong Kong's GDP, meanwhile, has gone from being equivalent to 18 percent of mainland China's in 1997 to less than three percent in 2020.
Hui greeted this comprehensive shift with a mild shrug.
"It's just a matter of changing who's boss," he said.
"We can only hope that our country's momentum will surpass that of Europe and the United States."
- 'The gateway to China' -
As China's economic and political power has grown over the last few decades, so have tensions with Western nations -- which has also affected Hong Kong.
Beijing cracked down on dissent in the city after massive democracy protests in 2019, prompting the United States to revoke Hong Kong's preferential trade status on the grounds that it was no longer autonomous enough.
Washington also sanctioned some Hong Kong officials.
"Back in 1997, we were able to play the role of a very important middleman. But now... everyone has more doubts about our background," Yan Wai-hin, an economics lecturer at the Chinese University of Hong Kong, told AFP.
"If a trading partner feels that (Hong Kong) isn't a neutral middleman... then the mutual trust might be lost."
Yan said regional rivals such as Singapore were looking to capitalise on what they saw as an opening to supplant Hong Kong.
Adding to that pressure, the tightening of political control has also meant Hong Kong has stuck to mainland China's zero-Covid policy.
Stringent travel restrictions have kept the business hub cut off both from China and the world for the last two years, with authorities acknowledging it has prompted a talent exodus.
But Ip said once restrictions were lifted, Hong Kong would recover.
"Our extremely advantageous geographical location is still there," she said.
"We're still the gateway to China."
- 'Complacent and insular' -
Some industries other than finance, though, have struggled after the handover.
"In the past 10 years or so, our GDP growth has lost steam and I think this had to do with Hong Kongers being complacent and insular," said Simon Ho, president of the Hang Seng University of Hong Kong.
The city's port, for instance, was among the world's busiest for decades but has slipped in the rankings after peaking in 2004.
"The government took a neoliberal, non-interventionist approach, and there was no blueprint for developing industries and the economy," Ho added.
He said authorities had devoted resources to sectors such as research and development, but that the results were "half-baked" and not competitive enough when compared with neighbouring tech hub Shenzhen.
"Hong Kong needs to figure out its role," Ho said.
"In the past, we didn't know how to complement the mainland, and in some cases even competed with it. In the long run, that will only get harder."
Hong Kong: A turbulent road from the handover
Hong Kong (AFP) June 29, 2022 -
Hong Kong has had a turbulent history since it was handed over from Britain to China 25 years ago.
Here are some key dates.
- 1997, the handover -
On June 30, 1997, at midnight, Hong Kong is returned to Chinese sovereignty after 156 years of British rule.
The tiny territory has its own mini-constitution that governs its autonomy as a Special Administrative Region within China. Beijing promises a "One Country, Two Systems" approach to the territory, meaning it will maintain freedoms that are not available to mainland Chinese.
The city is governed by a chief executive, chosen by a Beijing-controlled committee. Laws are passed by a legislative council, of which only a minority of members is democratically elected.
- Financial, then health crisis -
In October 1997, just months after the handover, the Asian financial crisis grips Hong Kong, plunging the financial hub into an economic slowdown.
Five years later a pneumonia-like virus named Severe Acute Respiratory Syndrome (SARS) kills 299 people in Hong Kong and 1,800 worldwide and devastates Asian economies.
- 2003, China steps in -
Beijing seeks to relaunch Hong Kong's economy, moving in 2003 to gradually lift customs barriers on Hong Kong products exported to the mainland.
Travel restrictions on Chinese from the mainland are eased, boosting the number of tourists.
- 2003, national security bill -
In July 2003, an unprecedented half a million of Hong Kong's population of seven million march against an unpopular national security bill, which they see as an attempt by Beijing to restrict their freedoms.
The bill is subsequently dropped, a rare government climbdown.
- 2004, Call for more democracy -
In January 2004, 100,000 people march through the city calling for more democracy, bringing to a head a simmering row over the constitution's diffidence on electoral reform. China in April rules out a swift change.
In July, hundreds of thousands of protesters again come out to demand more democracy.
- 2007, Universal suffrage promised -
In 2007, Beijing schedules for 2017 the first democratic election of the chief executive, and for 2020 elections to the legislative council. The promises disappoint pro-democracy demonstrators who were demanding universal suffrage from 2012.
- 2014, Umbrella Movement -
In 2014, Beijing proposes a limited version of universal suffrage -- Hong Kongers will be able to choose from a small group of Beijing-vetted candidates.
The announcement sparks a 79-day occupation of major thoroughfares known as the "Umbrella Movement". The protesters secure no concessions from Beijing, an outcome that prompts a minority of protesters in subsequent years to harden their positions, including advocating Hong Kong independence.
- 2019, Massive protests -
In 2019, the Hong Kong government tries to fast-track a bill through the legislature that would allow extraditions to China's Communist Party-controlled courts.
The move sparks the biggest protests Hong Kong has witnessed since the handover.
Millions take to the streets during seven months of unrest while a smaller section of hardcore protesters frequently battle police in often-violent confrontations that see thousands arrested.
The movement soon morphs into a new call for democracy and police accountability but is eventually suppressed.
- 2020, Covid-19 -
In January 2020, Hong Kong is one of the first territories to be affected by the coronavirus epidemic.
The executive takes drastic measures, including a ban on public gatherings, effectively ending the pro-democracy demonstrations.
- 2020, National security law -
In June 2020 Beijing passes a national security law for Hong Kong, bypassing the local legislature.
China's security agencies will be able to operate publicly in the city for the first time.
And Beijing will have jurisdiction over some cases, toppling the legal firewall that has existed between Hong Kong and mainland courts.
Calls for independence or for greater autonomy are banned.
Since then most of the pro-democracy leaders have been jailed, given up politics or fled abroad.
Many Western powers say the law has ended the principle of "One Country, Two Systems" approach, which was supposed to be in place until 2047.
- 2021, Electoral reform -
In March 2021, China approves a radical "patriots only" reform of the electoral system which completely sidelines the opposition.
In May 2022, Hong Kong's former security chief John Lee, who oversaw the clamp down on the pro-democracy movement, is nominated to govern the city in a selection process where he faced no rivals.
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