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. Last Updated: 07/27/2016

China's Governance Defies Expectations

HONG KONG -- On the day 10 years ago that this longtime British colony returned to Chinese rule, even the sky seemed to be crying over the territory's uncertain future.

The heavens opened as the old colonial masters waved their farewells and sailed away on the ship Britannia. Crowds lingered under umbrellas during the fireworks display that lighted up Victoria Harbor. At daybreak, another downpour drenched the soldiers of the People's Liberation Army as they crossed the border.

By that wet summer, half a million people had fled Hong Kong in search of safer harbors and foreign passports. But a decade after China's red, five-star flag replaced the Union Jack on July 1, 1997, much of the worry about Hong Kong's demise has dissipated like so many ominous thunderclouds.

Mostly left alone by a giant communist motherland busy undergoing its own metamorphosis, Hong Kong is thriving as a beacon of capitalism. The "one country, two systems" formula designed to preserve Hong Kong's freedoms and way of life for 50 years appears to be working, give or take a bit of muscle-flexing by Beijing.

In many ways, the last 10 years have been a testament to how much China has changed and Hong Kong has stayed the same.

"The concept of isolating Hong Kong's capitalist ways from China's socialism did not work in the way people thought it would work," said Michael DeGolyer of Hong Kong Baptist University, who has conducted extensive opinion polls in the territory. "China has utterly failed to change Hong Kong in their direction."

Instead, China has become more like Hong Kong -- economically speaking, at least.

When the late Chinese leader Deng Xiaoping was plotting the return of the colony in the early 1980s, China had just cracked open the doors of a closed, communist society where people worshiped Mao Zedong. Hong Kongers, with their business savvy and materialistic sensibilities, were considered spiritual contaminants.

Today, China is a capitalist paradise where making money is the new religion and communism in many ways is just a name. The country has joined the World Trade Organization, modified its constitution to protect private property and allowed entrepreneurs to join the Communist Party.

Hong Kong, however, is not nearly as transformed. But status quo is a good thing for this open, international city.

"I am still free to talk, free to read newspapers, free to make money," said Ping Lam Mak, 58, who runs a tiny stall carving Chinese names onto chops of stone in the heat of Hong Kong's central business district.

Since the return to Chinese rule, business has suffered in part, he said, because people can make everything much cheaper in mainland China. Other than that, he said, life is not so different and he's glad it has stayed that way.

Contrary to the doomsayers, Beijing did not shut down the territory's free press, arrest dissidents or patrol the streets with PLA troops. But neither has Beijing been willing to grant Hong Kong full democracy, which it fears could turn the territory into a rebellious example for the rest of the country.

On the surface, Hong Kong has retained much of the look and feel of a British colony. The double-decker buses drive on the left. Judges wear white wigs. English is widely spoken with a Cantonese-British accent.

Street protesters waving anti-government slogans, unthinkable in China, remain part of life in Hong Kong. But even as they strive to keep a distance from China's political repression, the people of Hong Kong have come to embrace the motherland.

"The mainland has seen how much tiny Hong Kong has changed the rest of China economically. If Hong Kong was unleashed politically, can you see why they would be nervous?" DeGolyer said. "If I am an old cadre, I'd be terrified."