CHINA BACK IN CONTROL BRITAIN BIDS FINAL FAREWELL TO HONG KONG RED FLAG NOW FLIES OVER HONG KONG.

Byline: Marcus Eliason Associated Press 

Among the anthems and flags, the fireworks and bagpipes, two scenes captured the essence of Hong Kong's most momentous night.

One was the Chinese president smiling while Hong Kong's new government was sworn in; the other, the melancholy tableau on the rainy waterfront where Prince Charles sailed away.

Similar rituals have played out elsewhere during the 50-year decline of the British empire, but not until Hong Kong returned to China at the stroke of midnight Monday had they unfolded before the eyes of the whole world.

The final climactic hours of 156 years of colonial rule ended with a dignified British retreat aboard the royal yacht Britannia. Behind the pier, where Chinese and British cried, cheered and hugged the departing leaders, the Chinese flag fluttered over an army barracks.

For the anxious and excited 6.3 million people of Hong Kong, the uncertain era under the sovereignty of an exultant Communist China at last had begun.

``The most precious thing for a nation and a people is to be master of their own destiny,'' said Tung Chee-hwa, the shipping tycoon chosen to lead the new Hong Kong.

The brief hand-over ceremony administered the coup de grace to 19th century colonialism and erased what China has always regarded as a fundamental humiliation - the 1841 seizure of Hong Kong from a Chinese emperor too weak to defend his country.

Shrinking role

For Britain, it was a melancholy reminder of its shrunken role on the world stage, although Prince Charles, along with Chris Patten, the last British governor, managed to turn their retreat into restrained spectacle of British patriotism.

But the big question about Hong Kong is still unanswered: Can a free capitalist society survive in the embrace of a Communist power, even one that has promised to keep Hong Kong politically and economically free?

The initial signs seemed mildly encouraging.

The Chinese army, widely feared in Hong Kong, showed punctilious discipline rolling into Hong Kong six hours after the hand-over. Long convoys of trucks, jeeps, buses and armored vehicles carried in 4,000 soldiers, who were greeted at dawn by villagers who lined the road, waving flags and banging cymbals in the driving rain.

When some Chinese officers stopped and stepped out, villagers put garlands around their necks.

A rally by democrats, who oppose moves to trim civil liberties and dismantle the elected legislature, passed peacefully after the new, post-colonial government yielded to their demands to deliver speeches from the balcony of the legislature.

The new lawmaking body went straight to work after its swearing-in today, activating a package of laws it had approved before the hand-over, including curbs on some of Hong Kong's civil liberties.

No opposition

The curbs empower police to ban demonstrations and prohibit foreign donations to political parties. The package was approved by a voice vote without opposition.

Except for rain that drenched the British farewell ceremony, the choreographed, eight-hour rite of passage unfolded with no apparent hitch.

Seconds before midnight, the Union Jack and the colonial flag came down, and eight seconds after midnight, the Chinese flag hung alongside that of the newly renamed Hong Kong Special Administrative Region of China.

``This is both a festival for the Chinese nation and a victory for the universal cause of peace and justice,'' President Jiang Zemin declared to the global array of foreign and Chinese VIPs assembled for the change of flags in the Hong Kong Convention and Exhibition Center.

``From now on, the Hong Kong compatriots have become true masters of this Chinese land,'' the stocky, bespectacled president said.

Charles, heir to the British throne, said Britain was ``proud and privileged . . . to have been part of the success which the Hong Kong people have made of their opportunities.''

At midnight, a cable from Patten had gone to London, saying: ``I have relinquished the administration of this government. God Save the Queen.''

After the flags changed, Charles and Patten boarded a motorcade that crept at funereal pace down the deserted, rainswept road, headed for the royal yacht Britannia. On the pier, Chinese and British friends hugged the popular, silver-hair governor and shouted ``hip, hip hurray!''

In Beijing, as in Hong Kong, the night sky filled with fireworks, and China threw a party for 100,000 guests at Tiananmen Square.

Ninety minutes after the hand-over, Chinese Premier Li Peng briskly swore in Tung as chief executive of the government that will run Hong Kong as a semiautonomous territory, fenced off from China and retaining its freedoms and capitalist system.

Jiang, who had sat poker-faced through the flag change, beamed as the new government took office early today, along with the high court judges and the 60 members of the incoming legislature.

U.S. boycott

The swearing-in radiated continuity; almost all Tung's top officials served in the colonial administration, as did the high court judges, who wore their British-style wigs and robes as they took the oath.

But China controversially used the same ceremony to swear in the unelected Legislature that will supplant the existing one.

That prompted a boycott by U.S. Secretary of State Madeleine Albright and British Prime Minister Tony Blair. But none of the ministers of some 40 other invited countries joined the protest.

China says the existing legislature must go because it was elected under rule changes it never agreed to. Beijing also is rolling back some civil liberties enacted without its consent.

Many of the Western foreign ministers in Hong Kong for the hand-over say Tung assured them he would keep his promise of a fresh election within a year.

But lawmakers excluded from the provisional body denounced it from the balcony of the legislative building 40 minutes after the change of sovereignty.

``We need the mutual trust of the Chinese leaders and our people. Sadly, that mutual trust has yet to be established,'' declared Martin Lee, leader of the Democrats, Hong Kong's largest party.

``You don't win trust by getting rid of the elected legislature and replacing it with a Beijing-appointed one.''

CAPTION(S):

4 Photos

PHOTO (1 -- color) Members of the combined Chinese Armed Forces color guard raise the Chinese red flag.

(2 -- color) Britain's Prince Charles, left, and former Hong Kong Gov. Chris Patten say goodbye from the royal yacht.

(3 -- color) An honor guard of the Chinese armed forces stands at attention.

(4 -- color) A woman, right, weeps among the crowd sending off the royal yacht.

Associated Press