The second system: Institutional compromise or compromised institutions inthe Hong Kong Special Administrative Region

Making the concept of 'one country, two systems' operational in Hong Kong h as been a significant challenge for China. The institutions of government p ut in place for the Hong Kong Special Administrative Region (HKSAR) had to satisfy a delicate balance between the Communist Party's need to ensure tha t the HKSAR poses no threat to its continue pre-eminence in China and provi ding an environment whereby Hong Kong's economy would continue to prosper. The arrangements settled upon represent a compromise which gives the Party much less control than it is accustomed to exercise, yet is far from being democratic. One key element had been the ability to recruit a Hong Kong lea dership which sees it as in its interest to work within the institutional c ompromise. The forces which shaped that compromise are outlined and the rec ord of the HKSAR examined.