In Hong Kong, things are looking up. The economy is booming. Tourism is up more than 50% from the SARS low. House prices are recovering after a 60% fall in 2002-03. Even civil servants are hoping for a modest pay-rise, after a couple of years of pay cuts. (That's an idea they didn't borrow from their colonial oppressors).
The Special Administrative Region is benefiting from the extraordinary industrialisation of the Pearl River Delta. Just across the border, Shenzhen, which barely existed 20 years ago, now has a population of more than seven million. Guangdong is even bigger. In terms of number, Hong Kong is dwarfed by its hinterland cities, but GDP per head there remains about eight times higher.
Maintaining that edge has required a major change in the shape of the economy. Manufacturing is now only 4% of GDP, down from 40% not so long ago – no more plastic toys 'made in Hong Kong'. And port activity is rapidly moving elsewhere. Hong Kong dockers are just too expensive.
So what's left? A city of seven million cannot live exclusively by selling Rolex watches to American tourists, or making suits for, and furnishing escorts to, visiting British bankers – or even by holding a successful rugby sevens tournament.
Tourism is important. There's now another Disneyland to avoid. But financial services are crucial. And, recently, Hong Kong has cashed in on an Olympic scale. The external environment has been uniquely favourable. The world's biggest IPOs are coming out of China. Shanghai, hamstrung by obscure regulations and the fact that the government still owns most of the shares, can't handle them. Sarbanes and Oxley have done for New York, at least for now. Chinese executives don't fancy a spell on Riker Island. And London is far away.
So the big new share issues have taken place on the Hong Kong exchange, and it has been party time in Wanchai and Kowloon: the Petrus restaurant on top of the Shangri-La hotel, Hong Kong's premier trough, has barely had a table free for months. They are thinking of raising a statue to Sarbanes and Oxley – one shrouded in red tape with the Stars and Stripes painted on it.
But will the good times keep rolling? Even if New York remains a pariah state in financial terms, surely Shanghai will get its act together one day, and a great sucking sound will be heard as the business moves north. That's the nightmare scenario preoccupying the denizens of the Hong Kong club.
Some think the game is already as good as lost. Why should Beijing lift a finger to help these crypto-Brits? The chief executive Donald Tsang wears bow ties, for Buddha's sake (a habit he was introduced to by Stephen Bradley, our consul-general) and accepted a knighthood from never- to-be-king Prince Charles.
The prince's unintentionally published observations on the 'appalling waxworks' of the Chinese leadership are thought, in Hong Kong, to have been 'unhelpful', which is about as abusive as they get.
On the other hand, we left the place with a few trump cards. The British legal system may be seen by Labour Home Secretaries as cramping their authoritarian style, but in the South China Sea it is the bee's knees. Lord Woolf was sitting in a case while I was there. He may frighten Charles Clarke, but investors in China find him a reassuring presence on their Court of Final Appeal.
UK-style corporate governance, too, is a strength. While some elements of Cadbury melt a little in the tropical heat, Hong Kong firms retain a clear edge over their mainland counterparts. So overseas investors are still a lot happier to have their money invested through the Hong Kong market than on the mainland.
For the moment, I think, the ayes have it. Former England rugby captain Martin Johnson, who arrived (for the sevens) at the same time as me (with rather more attention from the South China Morning Post) seemed to take the same view. And he is a man with whom it is wise to agree.
There is, however, the little matter of democracy. The deal with Beijing left behind by the Great Satan, Chris Patten, committed the city to an eventual move to universal suffrage, though with no agreed timetable.
Last year, Tsang proposed a modest step along that road, which introduced a bit more democracy into the system. But a group of elected members of the Legislative Council – a formidable bunch, I found – were having none of it. Too timid, they said. Half a loaf was turned down flat. Their votes killed it off.
No-one knows what happens next. The brooding presence of Beijing undoubtedly narrows Tsang's options severely. But with no movement at all, pressure in Hong Kong will build. And, like the French, Hong Kong Chinese take to the streets when necessary.
Overall, though, Blair's first handover of power, in 1997, may be accounted a success. 'One country, two systems' may look a bit rocky in Scotland, but it seems to be working well in Hong Kong. He must wonder if Gordon Brown will prove as reliable a guardian of his legacy as Jiang Zemin and Hu Jintao have been.
Howard Davies is the director of the London School of Economics