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When Hong Kong reintegrated with China in 1997, one critical issue was whether the flourishing center of economic activity with an efficient administrative framework would lose its advantages and become just another city of the People's Republic of China. This article examines the process of managing transition as socialist China tries to accommodate capitalist Hong Kong. With strong forces of globalization at play, both units have had to embark on administrative reforms to make their systems compatible with the demands of the new circumstances. An overview of the reforms they have undertaken reveals that convergence is possible despite markedly different points of departure. However, while the forces of globalization press for increased convergence, the forces of institutional arrangements and history present a major challenge. The balance of the push and pull of convergent and divergent forces will determine the direction and outcome of administrative reforms in China and Hong Kong.