Hong Kong ? Rock bands and dancing dragons celebrated the 10th anniversary Sunday of Hong Kong’s handover to China, but there were also protests to demand democracy and anxiety about the future of the ex-British colony.

After a bumpy decade of recession followed by a robust recovery with help from the booming mainland, its ports are losing dominance to Shanghai and Singapore, and impatience for full democracy is growing – a source of friction with the city’s Communist overlords in Beijing.

Many Hong Kongers agree the next 10 years will be full of tough challenges for the 7 million people living in this global business center on China’s muggy southern coast.

They fear rivals like Singapore and Shanghai will seize a bigger chunk of the city’s key businesses, such as shipping and financial services. And pollution is a severe problem.

As he began a new term Sunday, Hong Kong leader Donald Tsang reminded the public the city faces “fierce” competition and must transform itself. Tsang wants Hong Kong to be a financial capital on par with New York and London.

After 156 years of British rule, Hong Kong was handed back to China on July 1, 1997, with the promise that the city would enjoy a wide degree of autonomy from the Communist mainland. The territory was allowed to keep its capitalist economy, British-style legal system and civil liberties that mainlanders can only dream about.

For the most part, China has honored its hands-off promise.