There was an excellent map by our very own
@mdc_1957 (
mdc01957 on DeviantArt) a few years ago,
Casablanca of the East, with a very similar premise: while Macao is retroceded to the mainland as in OTL, deadlocked negotiations lead to Thatcher deciding to give China the middle finger and signs the Sino-British Agreement with
Taiwan instead. The Free City of Hong Kong - now a "Special Autonomous Territory" of the RoC - has a far better relationship with its sovereign compared to OTL. Taiwan's considerably more hands-off approach, combined with Hong Kong's freewheeling democracy, has led to the HK SAT becoming the closest thing to a corporate city-state on Earth.
More than symbolizing the end of an era for the British Empire, the Handover of Hong Kong represented a major historical shakeup in East Asia. To this day, even with long-declassified documents, historians and pundits debate the circumstances that led up to that momentous day in 1997. Some suggest that it was "Churchill's Janus deal" with the Kuomintang in the 1950s even while the UK formally recognized Communist rule in China. Other still point to the so-called "green tea parties" then-Prime Minister Thatcher arranged with both Beijing and Taipei, with the Taiwanese factor deliberately left out in the increasingly fruitless bargaining with the Mainland until the reveal of the Sino-British Agreement of 1984, which firmly set the stage for the Handover to the Republic, rather than the People's Republic of China; the press at the time recorded Thatcher's remarks on the matter as being a case "for the Chinese to decide" and more infamously, that "I'd rather see captains of industry than Communists overlooking Victoria Harbour." Regardless - with tensions by the 1970s-80s escalated to the point of several close calls and even scattered reports of skirmishes along the border - it seemed like a miracle that open war didn't occur, with the Mainland ultimately standing down from international pressure for pragmatic, economic reasons and under the begrudging pretense of one day allowing "peaceful unification" under the One Country Policy. So it was that, on 1 July 1997, Hong Kong saw the end of generations of British rule. A new chapter had begun.
It's been 20 years since then, and the Special Autonomous Territory of Hong Kong remains as vibrant and thriving as under its old colonial masters, though there's more to this than meets the eye. The 1997 Common Law Compromise, the main constitutional document, not only stipulates that the Territory is free to retain its old systems and customs for the next 50 years - pending plebiscite or any "significant, unforeseen regional event" - but both help allow and guarantee the freedoms and liberties enjoyed by the locals. While nominally under the Republic of China - represented in the so-called "Free City" by the Taipei Liason and with equal treatment in Taiwan's Legislative Yuan - Hong Kong has significant autonomy and leeway in running its own affairs, often either free of intervention or with tacit acceptance; although Taipei stepped in recently amidst calls to join the British Commonwealth in 2009 albeit as an observer, ostensibly to avert any potential escalation with the Mainland, such instances are the exception rather than the norm. In terms of external affairs and defense however, there's little doubt that the Taiwanese hold responsibility, with the R.O.C. armed forces allowed to send military police and other assets for security and overseeing the H.K. Volunteer Militia, itself directly descended from the British-era Royal Hong Kong Regiment. Due to both the delicate nature of dealing with the Mainland and desire to maintain the Territory's "openness to the world," military presence is officially borderline skeletal; this hasn't stopped the occasional visits from both the Royal Navy and American forces, nor has it prevented the Demilitarized Zone along the land border from being heavily guarded. And while there still remain activists and lobbyists calling for ever-greater autonomy if not outright independence, by and large the status quo remains firmly entrenched.
Another trend has become evident since the Handover, albeit one that had already been present for some time prior. Befitting Hong Kong's "openness to the world" and global economic weight, its brand of laissez-faire democracy has not only continued to thrived but is seen by pundits and economists to be evolving into what could be described as among the closest places the world has to a Corporate City-State; some go so far as to call it capitalism in its purest form. Over the years, privatization and the encroaching of both foreign and local businesses into the Territory's affairs have reached the point wherein conglomerates own whole neighborhoods, private security firms have proliferated - informally referred to as Hong Kong's other Volunteer Militia - and the Government outsources more public services to "approved" companies. Despite fears of wanton abuse as well as the risks, constantly invoked by both Beijing and the local Socialist Labour Party, of rampant inequality if not potential economic collapse, the present state of affairs has proven itself remarkably stable. Even with social tensions and at times fierce competition among local, Western, Taiwanese, Japanese and increasingly, Mainland businesses, most citizens have expressed generally firm satisfaction, particularly from the prestige and wealth coming in.
To understand the other side-effect to this state of affairs, one has to look past the neon lights and grand vistas. Given the Free City's reputation for being open to all, including the Communists across the border, it's also become a hotbed for more covert activity, and not just for corporate espionage or the occasional Triad transaction either. It's an open secret that in addition to the R.O.C. and P.R.C., the Americans and British are known to have listening posts and myriad secret cells, with assets from countries believed to also conduct secretive operations within the Territory's borders. All the while the influx of dissidents, political refugees and plain migrants seeking a better life continues seemingly unabated, though not to the same degree as during the Cultural Revolution; the claims of being a democratic and prosperous gate into "Free China" have only grown stronger over time, further bolstered by the local independent press. Despite all the potential for a major international incident to erupt at a moment's notice, most have little to no interest in openly changing, let alone putting a stop to such hijinks so long as the money continues flowing and people still at least superficially abide by civility. There's a reason why Hong Kong has also come to be known as the "Casablanca of the East."
This has only attracted more attention, and perhaps ire, from the Mainland Chinese however. Even with the reforms since the days of Chairman Mao or Deng Xiaoping and the economic ascension of the People's Republic, the Communist Party continues to look at Hong Kong with a sense of ambivalence. Not even the myriad white elephant projects and efforts to bolster the Macao Special Administrative Region - "returned" by Portugal in 1999 - as a glitzy, gambling haven have done much to really dent Hong Kong's status or position. More than once, there's been talk of blockading if not outright "liberating" the Free City should some heinous crime or act of sabotage be discovered. At this point, most have learned to pay little heed as not even the most stringent hardliners in Beijing would pull through with such threats, not at the risk of sparking a massive war that neither side wants nor with the so-called "Free China" corridor continuing to be maintained by the R.O.C. and its allies. Of course, the future remains an open book. Much can happen that can be unexpected.
Still, if the past 20 years have been any indication, then surely the next ones to come could only get better. At least that's the hope.
