It was in the late 1970s that Hong Kong began to focus on the issue of its future. The colony's officials and business people realized they could no longer put off the question of what would happen to the New Territories, which makes up more than 90 percent of Hong Kong's land area. The New Territories were leased to Britain by China in 1898, for 99 years. That lease was set to expire on July 1, 1997.

The British government initiated talks about Hong Kong's future in 1979. Gov. Murray MacLehose unexpectedly brought up the subject, during a meeting in Beijing with Chinese leader Deng Xiaoping. Deng made it clear that China intended to reclaim Hong Kong -- but he did recognize that the territory had its own special status.

In 1982, British Prime Minister Margaret Thatcher went to Beijing for talks with Chinese leaders. She called for British administration of Hong Kong after 1997, a suggestion Chinese officials rejected. The Chinese stated their intent to take back Hong Kong in 1997.

The talks over Hong Kong quickly deadlocked. The British hoped to extend their control over their most valuable colony, but China refused to accept the validity of what it considered unequal treaties forced on it by the British in the 19th century.

London eventually conceded there was no legal way to force China to renew the New Territories lease, and that modern-day Hong Kong could not survive without that major portion of the colony.

After months of negotiations, both sides agreed in 1984 to Beijing's proposal for a Joint Declaration -- making Hong Kong a Special Administrative Region, with its own distinct laws, freedoms and way of life. The S.A.R. would exist until 2047, 50 years after the British handover.

The Joint Declaration did little to ease many Hong Kong residents' fears about the future. And the crackdown on demonstrators in Beijing's Tiananmen Square in 1989 brought about angry demonstrations in Hong Kong, and calls to strengthen democracy in Hong Kong before the handover.

Hong Kong's last colonial governor, Christopher Patten, arrived in 1992, to pursue that goal. Patten angered Chinese officials by demanding democratic reforms in Hong Kong. Under his administration, Hong Kong had its first direct elections for the territory's legislative council.

But the success of Patten's democratic reforms in Hong Kong may be fleeting. There are already indications that Tung Chee-hwa, who will lead Hong Kong starting July 1, is working to roll back some of those reforms.