The language of the Joint Declaration was dry and mannerly, as such documents are wont to be. Yet the measured rhetoric and the apparent goodwill between the countries -- they note in the document their "friendly relations" over the past few years -- disguises what promises to be a change of momentous proportions.

Hong Kong is the world's eighth largest trader. Its foreign currency reserves are the sixth largest in the world. It has the world's busiest container port, and its gross domestic product is 21 percent that of China's. It is also the conduit through which flows two-thirds of all external investment in China.

The question, then, was how this bastion of capitalism could be accommodated by the world's largest communist country. The answer came from Deng Xiaoping, China's leader, who died last February.

When Hong Kong reverts to Chinese control, Deng said, China would become "one country, two systems."

Hong Kong would thus become a Special Administrative Region with a "high degree of autonomy." Socialism, as it is practiced in China, would have no place in Hong Kong. Capitalism, and its lifestyle, would remain unchanged in Hong Kong for 50 years.

Since the declaration was signed, a Joint Liaison Group composed of Chinese and British officials has met more than three dozen times to work out the details of the transition. It is to meet through January 1, 2000, attempting to smooth a transition that in many of its details looks more problematic than ever.