China challenged Beijing 's continued administration of Hong Kong when it said that it would repudiate commercial agreements made by the British not first agreed to by Beijing . This was seen as China 's attempt to undermine confidence in Hong Kong 's economy and defeat Governor Patten 's government . In the absence of a British climb down on democracy or defeat of Beijing 's proposals by the local legislature , China 's attacks could undermine business ventures in energy , communications , and trade . It added, however, that China encouraged foreign investment in Hong Kong. British and Chinese businesses in Hong Kong indicated that Beijing 's threat would not impact investment decisions . Share prices fell in response to the Chinese warning .
China challenged Beijing 's continued administration of Hong Kong when it said that it would repudiate commercial agreements made by the British not first agreed to by Beijing . This was seen as China 's attempt to undermine confidence in Hong Kong 's economy and defeat Governor Patten 's government . In the absence of a British climb down on democracy or defeat of Beijing 's proposals by the local legislature , China 's attacks could undermine business ventures in energy , communications , and trade . British and Chinese businesses in Hong Kong indicated that Beijing 's threat would not impact investment decisions . Share prices fell in response to the Chinese warning .