In 1997 the British state handed formal sovereign control of Hong Kong to the People’s Republic of China and at this moment an established prosperous community, one that had constructed a distinctive form of life within the framework of foreign controlled empire, and which had been subject to the demands of a distant master in London, was now faced with reordering its sense of itself and its links with the wider world around the newly announced authority of a new distant master in Beijing. It was a most unusual exchange. It was also an exchange fraught with danger. This text will consider the unfolding process of the creation of the Hong Kong Special Administrative Region, the actions and ideas of the elites involved, the responses amongst players in Hong Kong (both elite and mass), and seek to uncover the political logic of the process. Four issues will be pursued – the manner of embedding a new political settlement (Hong Kong as a restrictedly autonomous part of the wider political unit of China), the business of governing the territory (the local machineries of governance, seemingly configured so as to protect the elite of a long-established, sharply class divided polity) the affirmation of democracy (cast in two obvious variants – liberal democratic and state-socialist – with consequent rolling confusions) and the likely future of the extant form of life (a variant autonomy or dissolution).