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ONE COUNTRY, TWO SYSTEMS
In 1997, after 155 years of British rule, the British colony of Hong Kong returns to the People's Republic of China, under the terms of an Agreement between Britain and China signed in June 1985. The Agreement commits China to a unique arrangement whereby Hong Kong will become a Special Administrative Region whose economic, financial, administrative and legal autonomy is guaranteed for 50 years. It will thus be a capitalist enclave within a communist country: there will be 'one country, two systems'.
The Agreement specifies the people who will have the right to live in the new Hong Kong Special Administrative Region (SAR) after 1997. They will be: Chinese nationals born in Hong Kong, anyone who has been ordinarily resident in Hong Kong for at least seven years, and anyone else who had the right of abode only in Hong Kong' before it returned to China.' But the question of nationality was apparently too difficult to be resolved in the Agreement itself, and is therefore dealt with in an Exchange of Memoranda which accompa- nies the Agreement, but is not part of it.
Over 3 million of the present 51⁄2 million residents of Hong Kong have British nationality: they are British Dependent Territories citizens (BDTCs) (most of the remainder are immigrants from China). Britain's memorandum commits the UK to abolishing British Depen- dent Territories citizenship for people from Hong Kong and replacing it with an 'appropriate status' (that of British National (Overseas)) which cannot be passed on to children born after 1997. China's memorandum declares that 'all Hong Kong Chinese compatriots (i.e. people who are ethnically Chinese), whether they are holders of British Dependent Territories citizens' Passports or not, are Chinese nationals'; but that 'taking account of the historical background of Hong Kong and its realities', those people will be permitted to use travel documents issued by the government of the UK for the purpose of travelling to other states and regions'.2 (Appendix 2 gives details of
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