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How Britain handed Hong Kong to China in 1997 — and what followed under Tung Chee-hwa
Tung Chee-hwa, Hong Kong’s first post-handover leader, died at 89. Here’s how he led the city through its early years under China.
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Tung Chee-hwa, Hong Kong’s first Chief Executive after the territory was handed back from British to Chinese rule, has died aged 89. His office said he died peacefully on September 8, in the presence of family members. He served as Hong Kong’s leader from July 1997 until his resignation in March 2005.
Tung took charge at a pivotal moment: Hong Kong had just ended more than 150 years of British colonial rule and entered a new constitutional arrangement under Chinese sovereignty. His tenure became a test of how the territory’s promised autonomy would work in practice, amid an Asian financial crisis, disease outbreaks, economic difficulties and growing demands for greater democracy.
He also became a central figure in one of the biggest political confrontations of Hong Kong’s early post-handover years: the 2003 mass protests against proposed national security legislation. Two years later, Tung resigned, citing health problems.
How did Hong Kong come under British rule?
British rule in Hong Kong began after Britain defeated China in the First Opium War. Under the 1842 Treaty of Nanking, China’s Qing dynasty handed over Hong Kong Island to Britain. Over the next few decades, Britain expanded its control by taking the Kowloon Peninsula in 1860 and leasing the New Territories for 99 years in 1898. Together, these three areas made up British-ruled Hong Kong.
The 99-year lease on the New Territories created a firm deadline for Britain. By the 1980s, with the 1997 expiration approaching, Britain and China began talks over Hong Kong’s future. Because the New Territories made up most of Hong Kong’s land and supplied its water and power, governing the rest of the city without them was impossible. Instead of trying to hold onto just Hong Kong Island and Kowloon, Britain negotiated to hand over the entire territory.
These talks led to the Sino-British Joint Declaration, signed in Beijing on December 19, 1984. Under the deal, Britain agreed to return Hong Kong to China on July 1, 1997, and China agreed to govern the territory as a Special Administrative Region.
China promised that Hong Kong would keep its capitalist economy, lifestyle, and a high degree of autonomy for 50 years. Under this framework, Hong Kong kept its own laws, economy, and local government, while Beijing took charge of defense and foreign affairs.
How Britain handed Hong Kong to China
On the night of June 30, 1997, British rule in Hong Kong came to an end. At midnight, sovereignty over the territory passed to China and the Hong Kong Special Administrative Region was formally established.
Tung Chee-hwa, who had been selected months earlier to become the territory’s first Chief Executive, took charge of the new administration.
The transition therefore did not mean Hong Kong simply became governed in the same way as mainland China. Instead, it entered a separate system within the People’s Republic of China.
The arrangement was known as “one country, two systems”.
What was ‘one country, two systems’?
The Basic Law—Hong Kong’s constitutional document—said the socialist system and policies of mainland China would not be practised in Hong Kong. The territory’s previous capitalist system and way of life were to remain unchanged for 50 years.
Hong Kong was also to have executive, legislative and independent judicial powers, including a Court of Final Appeal. Its government was to be formed from local inhabitants, while the central government in Beijing retained responsibility for defence and foreign affairs.
The Basic Law also protected a range of rights and freedoms, including freedom of speech, press, publication, association, assembly, procession and demonstration. Permanent residents were given the right to vote and stand for election in accordance with the law.
At the same time, Hong Kong’s constitutional framework made clear that sovereignty remained with China. The Central People’s Government retained certain powers over the territory, while the HKSAR was responsible for its own administration and public order.
So, how did Hong Kong’s first leader get chosen?
The Basic Law did not initially provide for a direct popular election of the Chief Executive.
Article 45 said the Chief Executive would be selected “by election or through consultations held locally” and appointed by the Central People’s Government. It also said the ultimate aim was selection by universal suffrage following nomination by a broadly representative committee.
For the first Chief Executive, Tung was selected in December 1996 by a 400-member selection committee. The Associated Press (AP) reported that Tung was chosen by a panel of pro-Beijing elites.
That made Tung the person who would have to translate the new constitutional arrangement into day-to-day government when Hong Kong formally came under Chinese sovereignty.
Tung’s rule: crisis after crisis
Tung entered office as Hong Kong was confronting a rapidly changing economic environment. Soon after the handover, the Asian financial crisis hit the region, sending Hong Kong’s economy and property market into difficulty.
His government also faced public-health crises. Hong Kong experienced a bird flu outbreak in the early post-handover years, followed by the SARS epidemic in 2003, which killed nearly 300 people and caused major economic disruption, according to AP. His administration faced criticism over its handling of these crises.
Despite growing criticism, Tung was re-elected unopposed in 2002 by the pro-Beijing electoral committee. But his second term quickly became dominated by a political crisis that would have a much bigger impact on Hong Kong’s relationship with Beijing.
Why did democracy become such a major issue under Tung?
The biggest crisis of Tung’s rule came over Article 23—a constitutional rule requiring Hong Kong to pass its own national security laws against treason and subversion. When his government tried to pass the bill in 2003, residents feared it would erase their free speech and civil rights.
On July 1, 2003, half a million people marched in protest, forcing the government to scrap the bill in what Reuters called a turning point for Hong Kong's relationship with China.
The following year, large protests again took place, this time over demands for direct elections for Hong Kong’s Chief Executive and legislature. Tung sided with Chinese Communist Party leaders in rejecting those demands, according to AP.
The disputes deepened questions over how much political autonomy Hong Kong would exercise and how quickly democratic reforms would take place.
Tung announced his resignation on March 10, 2005, saying his health had deteriorated. At the time, he said: “If I continue as chief executive, I won’t be able to handle it.” Tung said health was the reason for his departure, although AP reported that some people suspected he had been pressured by Beijing because there had been no obvious signs of serious health problems in the preceding months.
What happened to ‘one country, two systems’ after Tung?
Tung did not disappear from public life after leaving the Chief Executive’s office.
He became a vice-chairman of the Chinese People’s Political Consultative Conference and remained a prominent supporter of Beijing. Hong Kong’s government said he served as a vice-chairman of the CPPCC’s national committee from 2005 to 2023 and was awarded the Grand Bauhinia Medal in 2006.
In 2019, during the major pro-democracy protests in Hong Kong, Tung remained aligned with Beijing. He was among those who received national medals and honours from Chinese President Xi Jinping that year for contributions to the country, with his recognition linked to implementing “one country, two systems”, according to AP.
In 2020, Beijing imposed a national security law on Hong Kong following the mass protests of 2019. Chinese authorities said the law was necessary to protect national security, while critics said it fundamentally changed Hong Kong’s political environment.
When Hong Kong finally passed its Article 23 national security law in 2024, it closed the loop on a battle that had defined Tung’s rule two decades earlier. But the political landscape had completely shifted since 1997. With tighter national security laws and stronger control from Beijing, the massive street protests that once forced Tung to back down were no longer possible.
Why Tung's term matters
Hong Kong’s current government has presented Tung’s tenure as a period in which he helped steer the territory through the difficult transition from British to Chinese sovereignty.
Chief Executive John Lee, in a statement after Tung’s death, said his predecessor’s leadership was exemplary in contributing to the smooth return of Hong Kong to China and implementing “one country, two systems” and the Basic Law. Lee also credited Tung with steering Hong Kong through the Asian financial crisis and other challenges while promoting economic and trade links with mainland China.
Former Chief Executive Leung Chun-ying called Tung “benevolent” and said he “won people over with reason”, while Carrie Lam said his leadership made “a historic contribution with lasting benefits”, according to BBC. But Tung’s eight years in office were also marked by political confrontation, unpopular government decisions and growing demands for democratic representation.
Tung’s significance therefore lies not only in being the first person to hold Hong Kong’s top office after the 1997 handover. His tenure was also one of the first major tests of how the territory’s new constitutional promise — Chinese sovereignty alongside a separate system and a high degree of autonomy — would work.
