One of the issues that troubled Hong Kong before plans were put in place for the city’s return to China was the long-term legal status of land leases. There was much uncertainty in the 1970s and early 1980s about whether such leases would have legal effect after June 30, 1997, as the city’s future beyond that date was unclear.

Reassurance was provided by the Sino-British Joint Declaration in 1984, which laid out a blueprint for Hong Kong as a part of China and promised the leases would continue to be recognised after the handover. It was followed, in 1997, by a general land policy.

Many leases have been renewed until 2047, when the 50-year minimum period for the “one country, two systems” arrangement expires. But questions have long been raised about the renewal of such leases beyond 2047.

Doubts have remained despite recent indications from Beijing that the one country, two systems concept is very likely to continue beyond that date.

A new law, which took effect on Friday, should ease concerns. It provides for the automatic renewal by the government of most leases for commercial, residential and industrial use for a further half-century.

The step is intended to provide stability and confidence as Hong Kong seeks to attract investors while playing a key role in the development of the Greater Bay Area.

But the legislation also has a practical benefit. From next year, the number of leases expiring will increase, with 300,000 due to expire on June 30, 2047.

The current system could not cope with the expected deluge of applications. A new, simpler and more streamlined approach was needed.

The new arrangements will see renewals granted six years ahead of the expiry of the lease, an improvement on the current three-year period. As now, there will be no premium, but an annual rent equivalent to 3 per cent of the rateable value must be paid.

Owners will have an opportunity to opt out.

This automatic renewal process will avoid the need for the government to enter into complex and lengthy negotiations over lease renewals with individual owners. Striking a deal is especially difficult in cases of multiple ownership.

The new arrangements will speed up the process and, it is hoped, avoid bottlenecks when the number of applications begins to increase. It makes sense to settle the issue well ahead of the 2047 deadline.

The legal amendments also will provide broader confidence in Hong Kong. They add weight to the belief that one country, two systems, introduced in 1997, will last for many years beyond 2047.

There is every reason why the concept, which preserves Hong Kong’s capitalist system and way of life, should continue long into the future.