Despite initial fears, Hong Kong develops into major gateway to China.(The Diamond Industry)

As the new year of 1997 approached, more than a few leaders of business, government, civil rights groups and the judiciary in Hong Kong, Britain, the United States and elsewhere were more than a little concerned. On June 30th, Britain's 99-year rule over its island colony was due to come to an end and Hong Kong would fall under Chinese rule once more.

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Despite the steps that China had already taken to open its economy up to the world, and its pronouncements that there would be few changes in the way that Hong Kong operated, there were widespread concerns abroad that life in the newly named Special Administrative Region would change drastically. Many feared that the freedoms its citizens enjoyed and its role as a business and financial centre would be sidelined, as Beijing sought to shift the regional economic focus toward the Mainland.

But 13 years later, to the outside observer life in Hong Kong appears to have changed very little. Indeed, they have gotten better. Sales of jewelry in the former colony, particularly to tourists, while not insignificant and providing employment for thousands of store and factory workers, are a relatively minor part of the area's diamond story. Hong Kong is quite simply the gateway to the huge emerging market of China.

When government control over Hong Kong switched back to China 13 years ago, there was still relatively little interest by foreign investors in China. Since the start of the last decade, however, the situation has been transformed. Not least of all in the jewelry business, with proof of that to be seen again at the …