So Long

Jardine jilts Hong Kong

Before there was a British crown colony of Hong Kong, there was Jardine, Matheson. The 152-year-old trading company, or hong, helped start the Opium War, forcing China to cede the island to Britain in 1841. In the years since, Jardine has evolved into an empire with $500 million in assets that handles everything from oil to finance. Last week the firm shocked Hong Kong by announcing that it will recharter itself as a holding company in Bermuda.

Jardine's move renewed the apprehension surrounding the 1997 expiration of Britain's lease on 90% of Hong Kong's territory and its transfer to Peking. The company's decision to change its legal address could encourage others to follow. Jardine Chairman Simon Keswick, 42, stressed that his company plans to divide its operations between Hong Kong and other cities. But, he added, Jardine wants to keep its "ability to operate under English law."

Hong Kong's financial markets reacted swiftly to the first business decision against Chinese rule by a major hong. The colony's Hang Seng stock index dropped 10.3%, to close the week at 1014.38.