A key factor undermining political confidence is future Hong Kong leader Tung Chee-hwa's plans to roll back some civil liberties.

China argues that the legal changes simply return Hong Kong to the status quo before democratic changes were initiated by British colonial Gov. Chris Patten, who was appointed in 1992. He increased the role of voters in choosing the Hong Kong legislature, which primarily had been appointed or indirectly elected.

Tung's planned changes, requiring police permission for protest rallies and banning international funding for political groups, are similar to those in most Western nations, Tung has said.

But Western governments object to the changes -- saying they are contrary to China's pledge to allow Hong Kong to continue its own way of life for 50 years.

Hong Kong Chinese have always had ambivalent feelings toward China.

A street scene from the summer of 1984, shortly after Britain and China reached their historic agreement, illustrates how the coming transition heightened those feelings.

Hong Kong residents gathered around department store windows to watch TVs tuned to the Summer Olympic Games from Los Angeles.

There was no doubt that they were rooting for China -- certainly not for Britain.

Half the residents of Hong Kong are refugees from China or the children of refugees. Many left everything behind to flee communism.

Hong Kong residents rooted for their mainland compatriots in the Olympics, but have been much less enthusiastic about joining China's "team."