I wrote this long comment on Hackernews in a thread about 20 years anniversary of handover from UK to China. Reproducing below:
Writing as someone who left Hong Kong when he was 14 who still visit every couple years, so take what I write with a load of salt.
I really think HK is over, as in it will never return to its peak glorious days. Much of the prosperity of HK came from being a middleman between China and the rest of the world. That position is eroding because China is slowly opening up. For example, of the top 5 container ports, 3 are in mainland China and HK is #5. HK was the busiest as recently as 2004. Why ship to/from HK when you can ship directly to/from China?
Much of the ruling elites (many of whom are/were businessmen or have business ties) understand this, and realize China has a lot more soft power over HK than what the Basic Law guarantees. The end game is clear, HK will become just another Chinese city, the Establishment is hoping that by pandering to mainland, they can slow down the process and maintain their self-interest. The more positive way to think about it is, if China allows, HK can become the Shanghai of the south instead of a little brother to Shenzhen.
Meanwhile, the poor. I grew up quite poor in HK and a family of 4 shared one studio. The kitchen and bathroom were shared with another 4-5 families. 4 of us slept in ONE bunk-bed. Life got much better after I was 7, because we moved to public housing in the suburb. You see, there's always a big divide between the rich and the poor, but all the public subsidies made life bearable.
A big part of HK's government revenue come from land sale. And land is more valuable when it's not used for public housing. That and immigration means the wait to get public housing is getting longer and longer. Immigration is supposed to increase revenue too, but as mentioned because a big part of revenue come from land sale and immigration doesn't increase the amount of developable land, the overall effect is smaller.
Normally one way to deal with this is impose immigration quota, but I looked into this a few years back and apparently for family reunion, HK government does not control the quota and have to accept however many the mainland sends over. For obvious reasons many in HK have family-ties in China so politically having a smaller quota would not be popular either. I don't have numbers to prove this, but there's a general sentiment that infrastructure is not growing fast enough to accommodate population increase.
I don't know what HK can do honestly. Politically it's in an impossible situation.