The glittering prize

The British legacy to Hong Kong does not include a proper democracy. Without this, its exploding economy may go into gradual decline

The Last packing cases are being trundled out of Government House, which may now become a museum of colonialism. Governor Chris Patten and the last few British bureaucrats are saying goodbye to the local staff who served them, and who will be back at their desks on Tuesday to serve China. Most of the British garrison have already gone, leaving their bandsmen to play out the end of nearly 156 years of British rule in Hong Kong at a farewell ceremony tomorrow on the shores of Victoria Harbour.

If there is any time for imperial nostalgia, this is it. Darkness will be falling as the Union flag comes down, though the lighting displays on the skyscrapers all around will be dwarfing the spectacle with giant "97" numerals and bauhinia flowers, the new symbol of the territory. The midnight handover ceremony, an event agreed to only grudgingly by the Chinese and fraught with wrangling until the last moment, is likely to be as devoid of feeling for the past as the newly built convention centre in which it is being held.

Hong Kong is far from being a sentimental place, as its willingness to tear down and rebuild at a mere hint of profit demonstrates. One British official said: "The Chinese are not going to hate us, but they're not going to thank us either. Emotions conflict too much."

Even if there is no gratitude for turning Lord Palmerston's "barren rock" into the world's eighth largest trading economy, whose 6.3 million inhabitants earn an average income higher than in Britain itself, opinion polls tell us that three-quarters of them are sorry to see the British go. Mr Patten's popularity is still consistently higher than that of Tung Chee-hwa, who will replace him.

Britain still has vast interests in Hong Kong. After tomorrow they will be centred in a minimalist granite complex in Supreme Court Road designed by the London architect Terry Farrell, whose brief must have been to extinguish any suggestion of tradition.

THE biggest British Consulate-General in the world will minister to direct and indirect investments of pounds 70bn, managed by more than 1,000 British companies, and British exports to Hong Kong worth nearly pounds 3bn a year, plus the exports that go to China through Hong Kong. The consulate will deal with 250,000 full British passport holders in a Special Administrative Region of China, and a further 3.25 million who travel on British documents. Next door, the largest British Council staff in the world will seek to keep the cultural flame burning.

The departing British administration is the first to insist, however, that Hong Kong's prosperity is due to the energy of the Chinese, and that all Britain did - in an endlessly repeated phrase - was to "provide a level playing-field". The rule of law ensured that a contract was a contract, and that there were no arbitrary threats to liberty. Officials neither took bribes nor dabbled in business (even if they saw it as their duty to secure the interests of the business class). The rest was up to the Chinese themselves; there is no reason to expect any gratitude.

Britain never put down very deep roots in Hong Kong. "The British Empire at its most tremendous," Jan Morris has written, "failed to make much impression ... and the mass of Chinese in Hong Kong today are not a jot less Chinese because they live beneath the Union Jack."

It hardly matters that some imperial insignia on letter boxes have yet to be replaced by bauhinias, or that the crown on top of the Legislative Council building is untouched (the dome below might collapse if it is removed), or that the new government says it has no immediate plans to change the name of Victoria Park or of the principal streets, most of which commemorate past governors.

YET everyone here agrees that Hong Kong's Chinese will not be the same as the rest of China's, and these differences are Britain's most important legacy to its former colony.

"This is an extraordinarily confident society," said one official. "They know - in a way that the British don't - that if you work hard and get a good education, you are on your way to heaven. There is nothing to stop you becoming as rich as you want."

Britain ran Hong Kong as a dictatorship, said another, but it was a benign dictatorship; the population became accustomed to making demands, and expected the government to respond.

If it does survive, that spirit will be a considerable obstacle to Chinese attempts to tilt the playing field. But Martin Lee, who is Hong Kong's foremost democrat, argues that the pitch has a big hole in it. An honest civil service and a bewigged and independent judiciary are no use, says the local QC, without a democratically elected legislature with powers to hold the executive to account and to pass laws which reflect public concerns.

From tomorrow night Mr Lee and his colleagues in the Legislative Council are to be replaced by a Chinese-appointed legislature, which will serve until elections are held, and the rules are to be determined by China. Meanwhile, legislators may pass retroactive laws which could put Mr Lee and his fellow democrats in jail - or worse.

Proper democracy is one legacy Britain has not left behind. Without it, the glittering prize it is handing over to China will tarnish, in ways that Peking - and the businessmen in its camp - cannot understand. British officials already worry that Mr Tung is surrounding himself with businessmen who cut him off from the advice of the senior civil servants still in place.

"The sharp divide between business and government will disappear," said a departing bureaucrat. "The business community is short-sighted: sucking up to the Chinese encourages them to behave in traditional ways, where guangxi [connections] is what counts. Corruption follows. I think most people recognise the great days are past, and that we are in for gradual decline. We delude ourselves if we think it won't change."

But change is a constant in Hong Kong. The difference now is that it is no longer up to the British. For better or worse, China has possession of the playing field.