When Democrat Martin Lee Chu-ming and his allies cried 'long live democracy' at midnight on July 1, 1997, from the Legislative Council's balcony, it wasn't just an alternative way to mark the handover. They feared party politics might face a grim future under the new administration. They had good reason. Unlike the pro-Beijing parties given seats in the provisional legislature, the Democratic Party and its allies were barred from it, despite their landslide victory in the previous election. A special edition of The New York Times in April 1997 on Hong Kong's handover spoke volumes. 'Hong Kong Political Parties Face a Big Question: Their Future,' its headline read, pointing to the possibility of people becoming more conservative amid leftists' 'scramble to accommodate themselves to Beijing'. To some, Hong Kong's reunification with the mainland signalled the beginning of the end for a new species on the political scene: political parties. They were largely a by-product of citizens' growing demands for a direct say in their own affairs in the years after the Sino-British Joint Declaration of 1984, which arranged the handover. But the pre-handover doomsayers were wrong. Ten years on, leading democrats such as Mr Lee and Hong Kong Alliance leader Szeto Wah have not been jailed for pushing for democracy. The Democratic Party is still the largest among the pan-democratic groups in the legislature, although it is plagued by internal rifts and competition from the Civic Party. The Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) - the city's main pro-Beijing party - has still not swept the majority of seats in direct elections, despite Beijing's support. Watching from the sidelines, and occasionally flexing their muscles by breaking from the government ranks, are the pro-business Liberal Party and The Alliance professionals' group, which are considered part of the so-called ruling coalition. This has led to a three-cornered balance of power, between the pro-democrats - dubbed 'the opposition' by some - the government and its allies, and groups of independent politicians. Now, the question is no longer whether political parties have a future but what that future will look like. Membership of the four major political parties is about 12,000, just 0.17 per cent of the city's 6.8 million people. Founded in 1992, the DAB prides itself on being the biggest grouping, with 9,967 members. Over the past 15 years, it grew from just one lawmaker to being the largest single voting bloc, with 12 Legco seats. The Liberals' membership topped 2,000 in 2003, thanks to an aggressive recruitment drive after party chairman James Tien Pei-chun's resignation from the Executive Council blocked the passage of the unpopular national security bill. But the number has since fallen to about 900. The Democratic Party, formed by a merger of the Hong Kong United Democrats and the Meeting Point in 1994, has only 630 members. The 15-month-old Civic Party is catching up, with 260 members already. One major obstacle to party politics is the concept of an executive-led administrative system. The pan-democrats have effectively been marginalised into a limited opposition role in the legislature by the proportional representation electoral system and Legco's split voting between functional and geographical constituencies. But Beijing's hope of nurturing loyalist parties to guarantee the passage of government policies and funding in Legco remains mere wishful thinking. The DAB has complained that its support of the government has often brought it more blame than glory. The party backed the unpopular national security law in 2003, which cost it a number of District Council seats the next year. Even the Liberal Party turned its back on the bill at the last minute in the wake of the 500,000-strong protest against it. The Liberals have retained influence largely through Legco's functional constituencies. But its leaders know that their all-but-guaranteed hold on seats in the business-based sectors would weaken in any move towards universal suffrage. The successful debut of Mr Tien and vice-chairwoman Selina Chow Liang Shuk-yee in direct elections three years ago assured Beijing that pro-business figures could win in elections based on full suffrage. The Democratic Party, on the other hand, has been plagued by a continuous fall in popularity because of internal power struggles and criticisms that it only 'opposes for the sake of opposition'. The party nurtured independent, pro-democratic lawyers, as middle-class professionals gradually awoke to political issues after the protest of July 1, 2003. Some, such as Audrey Eu Yuet-mee and Alan Leong Kah-kit, later broke away and founded the Civic Party. Hongkongers, meanwhile, are politically alienated. When asked which party best represented their interests, 53 per cent of the 700-plus respondents in a Chinese University survey in April said no parties could represent them; 12 per cent simply said they did not know. This low level of identification with parties may be attributed to the government's reluctance to formalise party development through legislation. 'We recognise that constitutional development and political party development are closely related,' the government said in a Legco discussion paper in December 2004. It said parties could help groom political talent and reflect public views on various issues, but stopped short of mentioning the norm in western democracies - their power to rule. The government argues that enacting a party law may not be the best means of encouraging party development at this stage. It prefers to provide 'an environment conducive to the growth of parties'. 'Political parties in Hong Kong are still at a developmental stage,' it said. 'Sufficient room should be allowed for political parties to grow. Imposing statutory control on the operation of political parties at this stage may hinder, rather than encourage, political party development.' Ironically, calls for a law on political parties have not been well received within political circles because most parties are satisfied to operate as registered companies. That arrangement, they believe, gives them freedom from government interference. To consolidate governance, the government is likely to appoint party members to fill ministerial posts. Under the plan, another layer of deputy ministers is to be created. Beijing also recognises the need for political parties in Hong Kong - but mainly to fill the legislature with allies who can muster votes in support of its hand-picked chief executive. The merger of the DAB and the Hong Kong Progressive Alliance - a party formed and backed by Beijing - was a clear attempt to boost the power of Beijing loyalists in society. One possible way forward for party development could be taken before the adoption of universal suffrage for the chief executive and lawmakers. That is a power-sharing model involving government allies and the opposition, formed by realigning the pan-democratic parties. A possible merger between the Democratic Party and the Civic Party was floated after the two parties co-operated in the chief executive election. This is considered an opportunity for the pan-democratic camp to revitalise itself. Lau Siu-kai, head of the Central Policy Unit, says the long-term development of political parties is set to follow the trend of western democracies - where all major parties are drawn to the middle ground of the political spectrum. 'It is inevitable that political parties in Hong Kong will take the path of becoming mainstream, middle-way parties,' Professor Lau said. 'As the political culture develops, the public tends to support those parties with a more middle-of-the-road mandate.' With Hong Kong emerging from almost a decade of economic turmoil, the government had finally started to win the popularity war with opposition parties, he said. 'For the first time since the handover, the popularity of the opposition parties has fallen lower than the government,' Professor Lau said, without substantiating his claim. 'This could lead to profound change in the political landscape. How that would be reflected in the upcoming election [for lawmakers] is something the government is watching with interest.' But unless Beijing reconsiders its opposition to political parities, there can be no ruling party in the legislature. Another obstacle is the split-voting system between functional and geographical constituencies, which is designed to minimise the influence of any single party. It is crippling the power of the legislature, and unless it changes, even a party with mass popular support will have little influence in Legco. If political parties have a future, it lies with the masses and their willingness to voice their demands within or outside the establishment, with or without universal suffrage. The parties must work harder to win public recognition and demonstrate their worthiness to play a bigger role in governance and politics.