The momentousness of the handover is widely misunderstood. June 30 marks the first time since the 1945 Yalta Conference that any territory anywhere in the world has been turned over to a communist regime without a fight. The consequences are serious - to lose one for freedom after a decade of consecutive victories. Yet the anticipation of some cataclysm is misplaced. When the sun finally sets on the last major outpost of the British Empire, it won’t be dark but twilight, a time of painful adjustments and long goodbyes.

As I was reminded on a recent visit, turning out the lights in Hong Kong is virtually impossible. This is a city with 4 million phones, more than a quarter-million fax machines, 700 magazines and 59 newspapers. The problem is more insidious: self-censorship. Journalists and politicians of all stripes agree that it has already begun. With the exception of a feisty and extremely popular paper called Apple Daily and a couple of other independents, the local press is mouthing a form of political correctness in its attitude toward Beijing. C. H. Tung, chief executive of Hong Kong, recently warned his democratic opponents not to ““bad-mouth’’ their city in the press, as if a little boosterism will see them all past the shoals.

Tung is in danger of entering toadyville. While the terms of the 1984 agreement outlining Hong Kong’s future explicitly call for free speech and a free press, Tung, the dutiful Confucian son, has declared that criticism of Chinese leaders is not permissible. The shipping heir is already setting a precedent as Beijing’s representative to Hong Kong, rather than the other way around. Yes, the British spent nearly 100 years violating the rights of Hong Kong Chinese, but that doesn’t excuse anything that China - through Tung - might do now.

So forget all those condescending lectures about ““Asian values’’ not including freedom. A free press is important on its own terms as a matter of basic universal human rights. Apple Daily is the canary in Hong Kong’s mine shaft - if it’s snuffed out, the world will know what the future holds.

But the more prosaic problem with both censorship and self-censorship is that they are bad for business. This is what American businessmen, who are optimistic about the future of Hong Kong (according to Chamber of Commerce surveys), apparently do not understand. They look admiringly at undemocratic Singapore and comfort themselves that Hong Kong is moving in that direction.

But the Singapore comparison applies to yesterday’s Asia. In the past 30 years, Singapore and several other Asian nations showed that authoritarianism could help them move from the Third World to the Second World. China is emphatic proof of that. So why have South Korea and Taiwan moved toward democracy? Because they are so humanitarian? A better explanation is that they now want to move from the Second World to the First World. Their growing business classes are insisting on more openness, just as Spain and Portugal went democratic in order to move up economically in Europe. Playing in the big leagues of the global economy demands no less. ““We’ve learned that authoritarianism is a cul-de-sac,’’ says one high-ranking British official, who is leaving Hong Kong a pessimist.

Democracy might be messy, but it is the only system that acknowledges its mistakes, that provides what business schools call ““negative feedback.’’ A free press, a freely elected legislature and a relatively uncorrupted bureaucracy are all essential to this self-cleansing system. Beyond democracy lies something called ““transparency’’ - which in Asia means accountability, public access and public records, the rule of law and not of connections.

To understand why the rule of law is so superior to old-fashioned guanxi (connections), a visitor need only cross the border into Shenzhen, the Chinese city that was Deng Xiaoping’s pride. In 1980 Shenzhen was an empty field; today it is a gangly ““Wild East’’ city of more than 3 million. It is also a pit, lacking not just Hong Kong’s charm but its coherence. The capitalism there is so unbridled, so unanchored in law, that buildings erected only five years ago are already falling down. Hong Kong will not become Shenzhen, and Shenzhen will not become Hong Kong; instead, they will likely meet somewhere in the middle, which is somewhere on the shoddy, ugly, less workable side of where Hong Kong is today.

At the end of one chapter of his classic work ““The City in History,’’ Lewis Mumford wrote simply: ““Come, hangman! Come, vulture!’’ It’s always illuminating to recall how fast some cities can strut and fret their hour on the world stage, then disappear. This is not likely to be the fate of Hong Kong. Its people are too resilient, its claim to First World greatness too strong. But the instinct for early nostalgia goes beyond the retreating English colonialist toasting the Union Jack with one last glass of bitter. For all who have known and loved Hong Kong, something has died, and we don’t quite know what is struggling to be born.