The return of Hong Kong marked a historic moment in China’s history. After the revolution of 1949, when China started to reverse the long-term decline of the nation since the early 19th century at the hands of European imperialist powers, the return of Hong Kong and Macao in 1997 and 1999 respectively represented the final end of colonial occupation on Chinese soil. Symbolically, the two events signify the beginning of the resurgence of China. Even the old European power, the United Kingdom, after its military victory over Argentina, could not subdue China. Instead, it suffered one of its biggest diplomatic humiliations in recent years, with its prime minister falling on the staircase outside of the Great Hall of the People in Beijing. China has not just recovered Hong Kong. It has wished it to achieve greater success after the handover by initiating an innovative “one country, two systems” framework to allow the city to leverage its international connections and functions with the strong backing of the Chinese mainland. The strategic thinking with regard to Hong Kong is consistent with the openness of China to bold institutional experimentation before and after the reform and opening-up policy.

In 23 years, Hong Kong has gone through a smooth handover, the first Asian financial crisis, the millennium IT bubbles, the SARS epidemic, the 2008 global financial tsunami, and the COVID-19 pandemic. The road has been bumpy, but the young SAR government has survived well, with continuous growth in population, and in economy and per capita GNP. Hong Kong stands firmly against and above competition as the major global financial center, serving the 24-hour circuit of world capital flows. The city has been more prosperous than before. In 2020, Hong Kong is not dead, as some Western media and politicians have tried to predict. It has hesitated in its development strategy as it is looking for new ways of development, to leverage on the “China factor” and the institutional bonus of the new “one country, two systems” regime. But 23 years for such a search seems a bit too long, given the rapid changes across the border in Shenzhen and the Pearl River Delta cities and in the world. Compared with Shenzhen and others, Hong Kong has been moving too slowly, and the lackluster performance has frustrated many people in Hong Kong, especially the younger generation, who would like to repeat wealth accumulation like their parents in the past and like their counterparts in mainland cities. The rapid changes in the world (with the great impact from the resurging China) have also gradually transformed the external environment Hong Kong is facing. With the decline in its hegemonic power and the speed-up of its deindustrialization, the US has begun to see China as a strategic competitor and even a threat instead of a partner. The deterioration in the US-China relationship has increasingly put political pressure on Hong Kong in the form of a US-initiated “color revolution”, which has resulted in extensive riots and terrorist acts. The coincidence of the political riots and pandemic from the second half of 2019 to early 2020 has posed the greatest challenge to the SAR government and the local society.

The political crisis has prompted the central government and the SAR government to resolutely solve the underlying institutional loopholes that allow political infiltration and incitement from outside. The Basic Law provides a mechanism to install a local national security law against external threats

China has an old saying, when there are challenges, there will also be opportunities. The political crisis has prompted the central government and the SAR government to resolutely solve the underlying institutional loopholes that allow political infiltration and incitement from outside. The Basic Law provides a mechanism to install a local national security law against external threats. Unfortunately, for many reasons, it has been postponed and delayed. To close the loopholes and display the determination of defending Hong Kong and national security, the central government has taken the effort to promulgate a local version of the National Security Law specifically for the special administrative region as of July 1, 2020. Despite opposition from within and without, the immediate effect of the law is a great blow to pro-independence activities and offers the prospect of a return of political stability in the city. With the voluntary disbandment of many pro-independence political groups in fear of the legal sanctions from the national security law and many of their leaders exiting from local politics for the same reason, it would be difficult for outside political forces to recruit local agents like in past years to revolt for a local regime change; they themselves would also be under close surveillance by the new national security agencies set up in Hong Kong as of Wednesday. There might still be political unrest and demonstrations, but none of them will have the chance to escalate into political riots again.

Political stability and certainty is not just the key to economic development, especially for post-pandemic economic restoration. It is crucial also if Hong Kong is going to take the opportunity to implement effectively a structural upgrading to deal with various issues of structural problems and to address the grievances of the younger generation of inadequate social mobility chances. After the SARS epidemic, the central government used the massive inflow of mainland tourists and the Mainland and Hong Kong Closer Economic Partnership Arrangement to stimulate the local economy. It would be quite likely that this time, there will be similarly positive policy and economic stimuli offered to Hong Kong. The Guangdong-Hong Kong-Macao Greater Bay Area initiative and the Belt and Road Initiative will promote a greater integration of the city with the more competitive region of the Pearl River Delta and the game-changing resurrection of the millennia Silk Road, thereby sharing their development bonuses.

There have been comments that this time will be the second return of Hong Kong to China, a return not just with a change of flags, but with a change of the minds of the population, a change that will bind Hong Kong people emotionally with their compatriots in the mainland and with the great dream of China’s rejuvenation after almost two centuries of decline and humiliation. After 23 years of experiences and lessons, Hong Kong society together with the central government should be in a much better position to realize the second return under a strengthened “one country, two systems” regime.

The author is director of the One Belt One Road Research Institute, Chu Hai College of Higher Education, Hong Kong.

The views do not necessarily reflect those of China Daily.