If major unrest grows in the territory and Beijing reacts by arresting pro-democracy campaigners or suppressing demonstrations and other protests, severe strains might be placed on Australia's policy of not directly criticising China on human rights.
There are signs, however, that with the approach of July the culture of guanxi and corruption is already becoming a feature of Hong Kong. Hong Kong is still very important for the Chinese economy and demonstrated success in the Hong Kong example is crucial for China's plans to effect an eventual reunification with Taiwan and Macau.
On the other hand, the idea that the legal and political institutions and culture in the territory have been genuinely important in underpinning Hong Kong's economic achievements does not appear to be universally accepted, particularly given China's recent economic growth under an authoritarian regime.
By the Convention ofthe New Territories together with islands were leased to Britain for 99 years from July 1, The main concern is not that there will be an abrupt change of policy but that the culture of corruption and guanxi connections in China will slowly undermine the open conduct of business and legal affairs in the territory.
Tung and the provisional legislature prepared for the first posthandover legislative elections in mid by reworking the rules of the political game. Contrary to the common perception that the people of the territory are interested only in business, there is a long tradition of grass-roots and activist politics in Hong Kong.
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