Background:
Hong Kong was colonized by Britain in 1842. Negotiations between the Chinese and the UK government on the future of Hong Kong began in the 1980s. The Sino-British Joint Declaration in 1984 confirmed that Hong Kong would be returned to China in 1997.
Details:
Chinese leader Deng Xiaoping proposed “One country, Two systems” as the main policy towards Hong Kong. It stated that Hong Kong would be able to keep its capitalist system, continue enjoying a high degree of autonomy and people’s way of life will remain unchanged for 50 years. The Basic Law, the post-1997 mini constitution, was drafted in 1990 to incorporate these principles.
Consequences:
The local population participated minimally in the whole transition period. There was no local involvement in the talks between the two countries. Although some local figures participated in the drafting of the Basic Law, all of them were nominated by Beijing and shared its conservative position. This arguably led to the debates surrounding the Basic Law and Hong Kong's relationship with China that we see now.
A lot of Hong Kong people feared the uncertainty after Hong Kong’s handover, which triggered a wave of migration to other countries. On 1 July 1997, Hong Kong’s sovereignty was officially transferred back to China and the HKSAR was established.
News Report from Independent, 01 July 1997