Leader: Hong Kong's crucial role in China's future

So Deng is dead. For many, the more newsworthy headline yesterday might have been: "Deng has been alive for the past six years". It seems the Chinese government had made contingency plans and that the death of their 92-year-old paramount leader failed to take them by surprise. So it is safe to assume that little will change as a result.

Nevertheless, this is a moment for us to pause and consider the future for the most populous nation on earth. For there is an important item of unfinished business that we have with China - the hand-over of Hong Kong, which is to be concluded in three months' time; and much about the future of the colony is still unknown.

Of course we do not presume to tell the Chinese government what to do. We hold back from declaring democratic capitalism to be a global value system, and urging the conversion of a quarter of the world's population to the virtues of Coca-Cola and high energy consumption. Human rights, on the other hand, are global values and we will continue to lecture the Chinese authorities about them. But on Hong Kong our appeal is primarily to their self-interest.

Deng was the intellectual and political father of the arrangement for transferring Hong Kong back to China. "One country, two systems", which will preserve Hong Kong's capitalist system and a degree of autonomy for 50 years, was his ingenious fix to assure the residents of the colony that their future was not in doubt. Deng was always described as a pragmatist.

But Deng will also be remembered in Hong Kong as the man who sent the tanks into Tiananmen Square, ending any hope that China could in the short term have a peaceful transition to democracy. Neither Hong Kong nor China itself have yet been reconciled to these events. Deng's death may begin the process, but as yet everyone is still tip-toeing around the issue. This week, the best that the normally outspoken Madeleine Albright could manage was to talk of the Tiananmen Square "actions" as "troublesome".

There were hopeful signs from Hong Kong yesterday that the spirit of pragmatism will be what survives Deng. Governor Chris Patten went to the de facto embassy of China in the colony to pay his respects. It is the first time that Mr Patten, regarded by the Chinese leadership as the whore of the East, has been permitted to enter this inner sanctum. The first aircraft (a test flight) landed at Hong Kong's new airport, which was once the most concrete sign of the violent disagreements between London and Peking. And Tung Chee-hwa, who will take over from Mr Patten as chief executive of Hong Kong, announced that the civil service heads of department will all be staying on, guaranteeing continuity.

So far, so good.

But there are several months to go before the transfer of power; and the party congress to decide on the new Chinese leadership will not be before October. Between now and then, a great deal will happen in both Hong Kong and China that could be far more destabilising than the widely predicted death of Deng.

It may be that now that Deng is dead, the new leadership - perhaps more coherent, more sure of itself - can consolidate reform, and in the process take a more emollient view of Hong Kong. But there is just as big a possibility that Hong Kong will become a political football in the succession struggle. Though the paramountcy of Jiang Zemin is assured, there could still be much jostling lower down the chain of command.

There is a debate about China's own future that could be played out over Hong Kong. The idea of "socialism with Chinese characteristics" - China's unique fusion of capitalism and socialism - is still an unstable mix that could be explosive.

Hong Kong needs to know that it will remain a place where the rule of law operates. That means that government as well as citizens are subject to law, and that the civil rights won under British rule will not be undermined.

Hong Kong is important to China's self-interest as the main junction box between mainland China and the world. The rest of the world is watching: the United States, in particular, has made a point of saying that it will regard human rights in Hong Kong as a bench-mark for relations between Washington and Peking. Ms Albright will not always be as tactful.

Then there is Taiwan to consider, another appeal to China's perception of its own interests: if Hong Kong can be shown to operate successfully under the "one country, two systems" label, then the same principle may eventually be transferable across the Taiwan strait.

When Deng saw Lord MacLehose back in 1978 to discuss the hand-over of power, he told the then-governor to return to the people of Hong Kong and "put their hearts at ease". Jiang Zemin and the others who will supervise the transfer of power in Hong Kong should take heed of this injunction.