HONG KONG : FINAL COUNTDOWN : Barren island' that bore fruit

Britain has always been ambivalent about its acquisition of Hong Kong during the opium war of the mid-18th century.

It was occupied by a naval force on 26 January 1841, but such was the lack of enthusiasm that Captain Charles Elliot, who was responsible for its seizure, was chastised by Palmerston for his lack of vigour in getting more out of the Chinese. Describing it as as "barren island", he raged: "You have disobeyed and neglected your instructions."

However, in 1842, the Treaty of Nanking was signed yielding the island of Hong Kong in perpetuity. In 1860, as Peking was occupied by the British and French, the garrison in Hong Kong decided it needed some space for exercises, as a result of which the Kowloon peninsula on the mainland and the tiny Stonecutters joined the Empire.

The colonial appetite, however, remained unsatisfied and by 1898 the biggest slice of Chinese land - the New Territories - was ceded to Britain as part of a European land-grab throughout China. It is the 99-year lease on the New Territories which expires a year from tomorrow: Hong Kong island, ceded "in perpetuity" is the heart of the colony's prosperity, but cannot survive without its hinterland.

In the years leading up to the Second World War, Hong Kong was a relatively poor, dowdy sort of place, much overshadowed by the glamour of the internationally bustling Shanghai.

After 1945, other colonies began to think of independence, but Hong Kong was more worried by the threat of Chinese occupation. The 1960s overspill of the Cultural Revolution provided a reminder of what might happen, but by the end of the 1970s the picture changed with the first opening of China's economy laying the foundations for Hong Kong's prosperity.

China indicated its desire to resume sovereignty over the colony informally in 1979 and formally in 1982. An abrasive meeting between Margaret Thatcher and Deng Xiaoping set the tone for two years of negotiations leading to the Joint Declaration which laid the basis for the transfer of sovereignty.