Throughout 1997 a shadow loomed over Hong Kong. After 156 years of colonial rule, the British were set to hand the territory back to China on July 1. There were news reports of Chinese troops massed at the border, and many islanders feared it would be the end of Hong Kong’s freewheeling capitalism. China tried to reassure residents that their most treasured customs would be protected. “Horse racing will continue, and the dancing parties will go on,” said Deng Xiaoping, the former Communist Party leader.