>Hong Kong's entire value, as far as I can see [...]

Keep in mind that that's the perspective you've been conditioned to see by the media you've consumed.

>If it becomes a homogenized satellite of Shenzhen with sky high real estate, which seems to be what China wants, what's left of Hong Kong?

Well, for one thing, the unstable political condition is likely to change the "sky high real estate" bit.

>I thought China was smarter than this. I thought they would realize the value of Hong Kong. Apparently China doesn't want Hong Kong.

Oh, please. They do want Hong Kong. They just want Hong Kong in a different way from how the rest of the world thinks Hong Kong is valuable to China.

>They want to remove the painful reminder of the Opium Wars and British influence in the Sinosphere.

The Anglosphere wants to remove the painful reminder of the Opium Wars. You seem to. China doesn't.

As for foreign influence in their own backyard, ever heard of NIMBY ("not in my back yard")?

>There will never be another place like it, and China is destroying it out of spite and ideological inflexibility.

Not quite. For one thing, Hong Kong has lost its lustre as "a place to live or to do business or to visit". Recent IMF data show that its GDP per capita is almost half that of Macau SAR:

https://www.scmp.com/news/hong-kong/hong-kong-economy/articl...

It's also fallen far behind as one of the world's busiest ports: Shenzhen now outranks it.

https://en.wikipedia.org/wiki/List_of_busiest_container_port...

It's not a matter of whether Hong Kong becomes "a homogenized satellite of Shenzhen", but when, because Hong Kong is already heading down that road.

What you, and other commentators, seem to fail to understand is that China absolutely wants Hong Kong, but not for it being an SAR. No. Reread Carrie Lam's leaked comments again:

https://www.reuters.com/article/us-hongkong-protests-carriel...

>Lam noted, however, that she had few options once an issue had been elevated “to a national level,” a reference to the leadership in Beijing, “to a sort of sovereignty and security level, let alone in the midst of this sort of unprecedented tension between the two big economies in the world.”

This has now been elevated to an issue of national security for China. Do you know why?

Because the Hong Kong activists are now demanding independence.

Set aside the issue of self-determination for a minute. Suppose you are playing as China in this game of Civilization and a city that you've got back is doing this. How would you react?

Would you fold to the demands of Washington and Elizabeth?

Or would you look at South Korea? At Taiwan? At how Mongolia got away with the help of Catherine?

Notwithstanding the rhetoric around the Opium Wars, Hong Kong is strategically valuable -- and not simply economically valuable -- to China because it's located on the other side of the mouth of the Pearl River from Macau. It's literally a physical gatekeeper to Guangzhou. Have a look at the geographic reality:

https://www.google.com/maps/@22.4267643,113.6415031,9z

(China does have detailed economic plans for the region: https://en.wikipedia.org/wiki/Pearl_River_Delta_Economic_Zon...)

Which is why China would hold on to Hong Kong tightly, as tightly as it'd hold on to Tibet or Xinjiang. For strategic reasons.