Patten's arrival as Governor in 1992 Marked a new stage inthe Sino-British struggle over ‘decolonization’ in Hong Kong. This struggle ishighly rhetorical and the local mass media call it a ‘war of words’.However, by adopting a strategic-relational approach, this article reveals a dual struggle over the politics of identity and the social basis for a new economic and political regime in the approach to 1997. The key protagonists (Patten and Chinese officials) have deploye various discursive strategies as economic and political circumstances in Hong Knog have changed. Global, regional and local factors and forces are shaping the emergence of two new, but still unstable, power blocs with different social bases. Whether these actions have an effect upon transforming the structural forms depends on the balanceof forces which is increasingly mediated by changes in discourses and discursive practices over time.