Because Britain had a 99-year lease on the New Territories, which comprise some 90 per cent of Hong Kong's territory. The rest of the territory was granted by China to Britain in perpetuity, but Hong Kong could not really function with just 10 per cent of its land mass. The New Territories lease expired yesterday.
So, will Hong Kong just be another part of China?
The post-colonial Hong Kong is called a Special Administrative Region of China, and will have a high degree of autonomy from Peking for a period of 50 years during which the territory will be allowed to continue with its distinctive laissez faire system.
That sounds very much like the party line.
That's because it is the party line.
What's the truth then?
Hard to say, but it already looks as though the promised high degree of autonomy won't be realised. There are already signs that the Chinese leadership is actively intervening in the running of Hong Kong.
China has insisted that new laws be enacted against secession and subversion. Chinese leaders have also indicated that certain types of criticism, such as personal attacks on the Communist Party leadership, will not be tolerated.
But surely the Basic Law, Hong Kong's new mini-constitution, guarantees all the existing freedoms and rights?
Yes, up to a point, that's true. The Basic Law protects press freedom, the right of assembly and freedom of speech, but it may be argued that the rather dusty document called the Chinese Constitution also contains many guarantees of rights which are more honoured in the breach than in the observance.
Are you saying then that as from today Hong Kong can kiss goodbye to the high degree of liberty it has enjoyed in the past?
It is very hard to be quite as categorical as that. Tung Chee-hwa, Hong Kong's new head of government, promises to be a protector of the territory's liberties, and has even said he would resign if he saw them being undermined. At the same time, he has been an active proponent of all the measures which the Chinese government wants introduced to curb civil rights.
Surely all this is only the concern of a handful of political activists?
Not really. The fate of civil liberties goes to the heart of questions related to the rule of law. If the current legal framework is changed to accommodate a more oppressive civil rights regime, it will send a clear signal that the rest of the legal framework is in question.
But we've been told that the legal system will remain unchanged.
True, and the new order has made a good start by appointing a well-respected lawyer, Andrew Li, as the Chief Justice. But at the same time, Mr Tung and Elise Leung, the new Secretary for Justice, have been blithely talking about new laws having retrospective effect and seem happy to see new legislation enacted which gives wide, unspecified powers to the authorities to act against political opponents.
What about elected forms of government ?
As of today, all elected tiers are being scrapped and replaced by new bodies. The old elected legislature has been kicked out and replaced by a China-appointed body, and at local level, the former elected councillors have been allowed to retain their seats but are being supplemented by appointed councillors, almost all of whom are supporters of the new administration.
Surely this is no more than a temporary measure, to be followed by elections?
Elections have indeed been promised within a year. The question is whether, as Robin Cook, the Foreign Secretary put it, "they will be free and fair". Some of the rumoured plans for a new election system have the smell of election rigging.
Some things won't change will they ?
Actually many things won't change, or will only do so very gradually. The currency, for example, will remain the same, English remains as an official language and Hong Kong will retain its own border controls, specifically meaning that people from the mainland will need permission to come in.