By James Pomfret and Sisi Tang
HONG KONG (Reuters) - As Hong Kong's outgoing leader Donald Tsang looks ahead to retirement, an unusually toxic public debate over the burden placed by a flood of mainland Chinese visitors has struck at the heart of Hong Kong's often rocky transition from British colony to Chinese special administrative region that began in 1997.
Tsang, knighted by the Queen of England and a trusted aide to Hong Kong's last British governor, Chris Patten, has staked Hong Kong's future ever more closely to China in his seven years in office, despite thorny issues such as a push for full democracy in Hong Kong.
Twenty-eight million mainland Chinese visited Hong Kong last year, around four times the population of the city, many flush with cash and on the hunt for everything from baby formula to hospital beds and luxury brands to high-end apartments.
Cross-border marriages have proliferated and Beijing's leaders have bestowed countless economic sweeteners on the city to cement the mainland's embrace of Hong Kong.
At the same time, grassroots resentment has boiled over in Hong Kong toward this influx of mainland Chinese visitors on a number of fronts, including healthcare and housing, presenting a twilight challenge for Tsang and his government's legacy of symbiotic integration with China.
Insults are being hurled across the border, with some Hong Kongers decrying the mainland Chinese as "locusts," while one Chinese professor called Hong Kong people "running dogs" of the British.
Some say Hong Kong's overly China-focused policies have corroded the city's uniqueness, international character and values and those policies might now need revising. Mainland Chinese counter that Hong Kong for too long looked down on its mainland cousins and should not enjoy favored status from mainland leaders.
Besides opening the floodgates to millions of free-spending Chinese after tourism went into a tailspin because of the SARS outbreak in 2003, China's leaders have offered sweeteners to Hong Kong, including a closer economic partnership agreement and backing it as a capital raising centre and offshore yuan settlement hub.
"It's all an outcome of a set of inclinations toward China policies laid down by the government 15 years ago," said Chip Tsao, a well-known columnist and writer in Hong Kong, referring to the first post-handover administration of the unpopular, Beijing-backed leader, Tung Chee-hwa, whose policies sparked a mass, half-million strong anti-government demonstration in 2003.
"More Hong Kong Chinese see this in light of a bit of a conspiracy theory. They see it as a kind of colonization of Hong Kong, or re-canonicalization of Hong Kong, of which the Donald Tsang government is definitely a collaborator."
FLOOD OF CHINA BABIES
One of the most controversial issues has been that of mainland Chinese mothers flocking to Hong Kong hospitals to give birth, partly to circumvent China's one-child policy and also to gain the right of abode in one of China's most developed and wealthiest cities. A broad provision in Hong Kong's mini-constitution, the Basic Law, grants Hong Kong citizenship to any Chinese born here.
In 2010, of the 88,584 newborns in Hong Kong, around a third, or 32,653 were born to mainland women, up from 620 babies in 2001. The influx has spawned an entire industry of agents shuttling Chinese mothers en masse across the border, hiding them in illegal 'inns' before birth.
This week, a group of aggrieved Hong Kongers placed an incendiary front-page advertisement in the city's populist, mass circulation Apple Daily newspaper, denouncing Chinese women for crowding out Hong Kong's hospitals to the extent that maternity wards are booked solid until September.
"Hong Kong people have had enough!" the ad proclaimed in large Chinese characters beside a picture of a giant locust on a hill overlooking Hong Kong's skyscrapers and iconic harbor. "Stop the invasion of mainland mothers" it added.
On the other side of the argument, there are signs that more and more mainland Chinese are becoming weary of Hong Kong's favored status, signs that China's stability-obsessed leaders may find hard to ignore.
"If it wasn't the mainland Chinese treating you like a son, you would have died long ago," a retaliatory advertisement, widely circulated on mainland Chinese microblogging sites in response to the locust slurs.
"We must not allow this son (Hong Kong) to ride on our shoulders anymore. Let's temporarily cut off the son's water, electricity and food!"
HONG KONGER OR CHINESE
A confluence of other incidents and issues has also stoked debate, protests and frustration.
Many Hong Kongers blame wealthy mainland Chinese for driving property prices beyond the reach of local citizens. Mainland Chinese snapped up around a third of residential flats last year, according to Nomura research, and home prices have risen as much as 70 percent since 2009.
Last year, mainland mothers, spooked by China's toxic melamine milk powder scare, bought up massive stocks of tinned milk powder from Hong Kong stores, leaving bare shelves and anxious Hong Kong mothers scouring shops citywide for formula.
"If I'm worried that my service or what I'm entitled to is being taken away...then of course there's resentment," said Elaine Chan, an academic at the University of Hong Kong who has researched post-handover Hong Kong identity and social issues.
"When you get to a certain point, people may just say enough is enough. I have to do something or I have to say something...We're probably almost there."
The gripes found another lightning rod last month when a heated argument between a Hong Kong man who castigated a mainland Chinese visitor and her daughter on the city's subway for eating a bowl of noodles, went viral on YouTube.
The feud spurred a Peking University professor, Kong Qingdong, to call Hong Kong people "dogs" for their cultural superiority. His comments incensed many in Hong Kong and triggered a media backlash as well as protests outside China's Hong Kong liaison office.
"Even with the narrowing gap between the two sides in aspects such as the economy, building a strong sense of shared identity is still a tough job that will take time," China's state-run Global Times wrote in an editorial. "More efforts are needed from both the mainland and Hong Kong in this run-in period," it added.
A shared identity may be hard to find however. Results from one of Hong Kong's most respected public opinion surveys suggested growing resentment towards mainland China.
A December poll on the extent to which Hong Kongers identified themselves as Chinese citizens first or as a Hong Konger first dropped to 17 percent, the lowest level in 12 years.
The pollster, Robert Chung, was subsequently denounced by a mainland propaganda official in Hong Kong. Hao Tiechuan, director of publicity, culture and sports at the central government liaison office, called the poll "illogical," while mainland media accused Chung of fomenting unpatriotic sentiments and of having "evil" political aims.
PRESSURE FOR CHANGE
Tsang said China's premier Wen Jiabao had acknowledged in December the concerns of Hong Kong people over pregnant mainland women. Hong Kong has since imposed tighter immigration checks to screen pregnant women entering the city and crack down on shady childbirth middle-men and agents. The government may also impose quotas on mainland mothers.
Pressure, however, has been building on Tsang to consider a more permanent and potentially controversial fix: to amend the city's Basic Law so that babies born to mainlanders in Hong Kong are no longer granted the right of abode.
"We must tackle the problem at its root," said Gary Fan, part of Hong Kong's tenacious opposition pro-democracy camp. "Hong Kong has come to a historical moment. We need to amend our Basic Law in order to suit the needs of this city."
As one of the world's most crowded places with 7 million people often holed up in tiny, high-rise flats, Hong Kong needs a broader development blueprint going forward, some experts say, to avoid infrastructure strains.
"The Hong Kong government needs a clear population policy, then determine how many people can come, set quotas...that would include studies of not just health services, but other public services such as education," said Jianfa Shen, a resource management academic at Hong Kong's Chinese University.
For Hong Kong, however, any moves must avoid jeopardizing the China links and goodwill of which regional rivals like Singapore can only dream.
(Additional reporting by Alex Frew McMillan; Editing by Anne Marie Roantree and Matt Driskill)