The experiment will be unique in the annals of Communism's relations with capitalism. After nearly two years of negotiations, the governments of Britain and China last week completed a draft agreement that will end British rule in Hong Kong and launch a local government that, while being part of Communist China, will be based on private enterprise. Under the terms of the accord, to be initialed in Peking this week, Britain will continue to administer the thriving capitalist enclave until 1997. But in 1988 a 13-year transition period will begin during which a "joint liaison committee," selected by Britain and China, will oversee the transition from British rule to self-government under Chinese residents of Hong Kong. Although Hong Kong will become a "special administrative region" of China after 1997, it will maintain its "present system of law" within a capitalist framework for at least 50 years more.
Chinese officials were delighted that the agreement was reached in time for the Oct. 1 National Day celebration commemorating 35 years of Communist rule. The British Parliament and the Chinese National People's Congress must still formally approve the accord, but neither government expects much opposition.