The moment capped days of excited anticipation in the Chinese capital. Its major streets decorated with fairy lights, coloured flags and red Chinese lanterns, Peking has enjoyed an unusual carnival-like atmosphere.
Residents and visitors alike have thronged to Tiananmen Square in recent days, brandishing both the national flag of China and the new flag of the Hong Kong Special Administrative Region.
"This is an extraordinary day for all Chinese people, no matter where they live. This is a day to remember forever," said Liu Jinghai, who travelled from Shanghai together with his wife, daughter and parents to be in Peking for the festivities.
Mr Liu and his family spent yesterday afternoon strolling the square and then joined a long queue of people waiting to snap their photographs in front of a huge digital clock that for months has been counting down the days and seconds to the Hong Kong handover.
"We just want a picture of ourselves in front of the clock as it shows only one day remaining," his 12-year-old daughter said.
While ordinary citizens have been granted a two-day holiday to mark the turnover, thousands of Chinese police and paramilitary police have been working overtime.
Their task has been a delicate one. Although the Chinese authorities have encouraged an energetic and patriotic response, they are also concerned about the potential for any spontaneous outpouring to turn disorderly or, worse, into an occasion for the expression of other, unsanctioned political views.
Tiananmen Square remained open to all of Peking's 11 million residents until late on Monday afternoon, but attendance at the all-night party was limited to a carefully chosen elite of 100,000.
Those in Hong Kong who fret about the presence of Chinese troops in their midst might take some cheer from the behaviour of the Peking police who yesterday cleared tens of thousands of revellers from the square to prepare for the evening's celebration.
Passably civil if not quite polite, uniformed police shepherded crowds away from the vicinity of the massive square and urged people to go home and watch the festivities on their televisions.
They were armed with nothing more than bullhorns, but visible in the back streets around the square and on the grounds of the nearby Museum of Revolutionary History there were additional police, prepared to provide extra support.
Many members of the crowd sought to linger, or to wander back toward the square, but they all good naturedly heeded the warnings to continue moving away.
"I am sorry I can't attend tonight's party, but I am very happy to be able to come here today," said a mid-ranking official in the Chinese Ministry of Justice, who declined to give his name.
"I lived for five years in Japan and I could have remained there, but I wanted to come back. This is a great time to be in China. Our country is growing strong and Hong Kong's return is the greatest proof of that," he said.
Elsewhere in Peking, excitement likewise verged on disorder. A branch post office on South Dong Si Avenue was besieged by an unruly crowd hoping to get part of an advance allotment of special commemorative stamps being issued to mark the return of Hong Kong to China.
At least one thousand people queued around the block, with the two hundred of them nearest the front pushing forcefully to get in.
"I have been waiting here for two hours, and I am planning to buy the special edition gold-foil stamp. I think it will go up in value, but I mainly want it as a souvenir," said one punter who declined to give his name.
For all their excitement, some in Peking said yesterday that they were growing weary of the lengthy build up to the turnover, and of the centrally choreographed celebrations.
"The return of Hong Kong is of course a very nice thing for China, but I wish the government would spend less money on lights and banners and decorations. They should be spending that money to build decent housing for ordinary people," one Peking driver said.
Reuters - A choir of 10,000 singers lined the banks of Shanghai's Huangpu river and sang the revolutionary hymn "Without the Communist Party there would be no New China" and a new pop song "1997". In the boomtown of Shenzhen, lion dancers, children beating drums and flag-waving residents cheered as the first 509 active troops of the People's Liberation Army entered Hong Kong.