Hong Kong politics is often described as a contest between the blue and yellow camps. On the blue side are the conservative, pro-establishment forces, many of whom are people disillusioned by the West because of what they see as its growing bias against China. Across the divide is the other Hong Kong, consisting of people who identify with what they perceive to be Western values. Some of them retain an emotional bond with the territory’s heritage as a British colony and wish for more distance for Hong Kong from the mainland. This situation is all wrong. Dug into their trenches, both sides are missing the key point about Hong Kong. The point is that from here on, there are only two roads left on which to travel. The first road will see Hong Kong people continuing to rule Hong Kong to a large extent. Cantonese remains the main language , and the city retains its distinctive culture and system of law, administration and social order, thus maintaining the local way of life. On the second road, Hong Kong’s identity will become blurred. Mandarin will increasingly displace Cantonese as the key language, overtaking the local language as it did in Shanghai and Shenzhen. The behaviour of local society will increasingly resemble that of the mainland as Beijing’s influence becomes pervasive. In other words, “ one country, two systems ,” which is what Road One is all about, will become “one country, one-and-a-half systems”, which is how Road Two is going to be. The first road is much better for Hong Kong. The central government wants one country, two systems to succeed as Hong Kong is more valuable to China as a showcase city that connects the mainland with the rest of the world. Successful autonomy for Hong Kong could also improve China’s ability to settle the Taiwan issue . So why is there a growing risk that Hong Kong will end up on the second road? To a significant degree, both the blue and yellow camps must take responsibility. The street protests of 2019 prompted the central government to ask whether Hong Kong might abuse its freedoms. Beijing’s clearly stated position is that Hong Kong is part of China and cannot be separated or used as a base to subvert the rest of the nation. So Beijing rushed through the national security law, which helped restore stability but also pushed the city closer to Road Two. Deteriorating trust also caused Beijing to review some civil liberties, such as the content of schoolbooks . When will the yellow camp learn that politics is the art of the possible? It is unrealistic for Hongkongers to challenge today’s powerful and confident China. Even during the 1980s, when the country was much weaker, Britain could not push China to accept anything short of a return of Hong Kong to Chinese sovereignty. Playing hard ball makes even less sense since central government policy was to use a light touch in Hong Kong affairs, preferring largely to let Hong Kong people rule Hong Kong. Fundamental issues of life, liberty and dignity were not at stake here. With hindsight, widespread frustration in Hong Kong society caused by unaffordable housing and other livelihood issues were channelled into a blame game that targeted China. It is only fair to point out that these social and economic ills were not caused by Beijing but by Hong Kong’s own system of extreme capitalism . Here is where the blue camp must be held accountable. The conservatives – in politics, business, the civil service and the professions – simply lack the courage and vision to push for change. Hong Kong’s laissez-faire system, focused on a blind pursuit of corporate profits, benefits a privileged few but leaves out ordinary people. As I argued previously, the system needs to evolve towards “ stakeholder capitalism ”, which takes responsibility for shareholders, employees, the overall community and the environment. Such an initiative would align Hong Kong with efforts all over the world, including the mainland, to make society more inclusive. If Hong Kong does not act, social tensions will stay high, as will the risk of renewed turmoil in the future. Beijing might intervene again, for example to sort out the housing crisis . Such intervention would nudge the city away from the first road and towards the second. MTR Corp should stop feeding the housing crisis and help solve it instead In other words, to stay on the first road, Hong Kong needs a refresh of its own system to make it more sustainable. If this does not happen, it becomes increasingly difficult for the central government to avoid intervention because of the problem of moral hazard. What this means is that Beijing is expected to come to the rescue if Hong Kong gets into serious difficulty, yet wealth creation in the city largely benefits only a small local elite . Hong Kong’s politicians, whether blue or yellow, are clearly a failed breed, with just a few exceptions. Their defining characteristic is a lack of situational awareness. No leader has emerged who can rally the people and create a sense of community. Achievable goals, such as universal suffrage, were allowed to wither away. But having said all that, history is likely to be kind to Hong Kong. This is because Hong Kong will remain useful to the mainland, regardless of whether it exists on the basis of one country, two systems or one-and-a-half systems. With China on track to become the world’s largest economy within a decade, Hong Kong should still have a role to play as a connector city. Beijing is committed to the stability and prosperity of Hong Kong, even using different assumptions. The question is: will the Hong Kong way of life survive and which language, Cantonese or Mandarin, will become the key language? Cheah Cheng Hye is the co-chairman and co-chief investment officer of Value Partners Group, an asset management firm in Hong Kong