The characters combine literally and directly to mean “One Country, Two Systems.” The meaning is transparent once you know the individual characters.
“One Country, Two Systems” is not just a phrase; it's a cornerstone of modern Chinese political thought and foreign policy. Proposed by Chinese leader Deng Xiaoping in the early 1980s, its primary goal was to resolve the historical questions of Hong Kong (a British colony) and Macau (a Portuguese territory) and facilitate their return to Chinese sovereignty. The policy was a masterclass in pragmatism. It acknowledged that forcing a socialist, state-controlled system onto the thriving capitalist economies of Hong Kong and Macau would be disastrous. Instead, it promised that for 50 years after their respective handovers (1997 for Hong Kong, 1999 for Macau), they could maintain their own systems, including legal frameworks, economic policies, individual freedoms, and way of life. Comparison to a Western Concept: This is often compared to federalism (like in the United States or Germany), but the comparison is flawed. In a federal system, states or provinces have their own laws but operate within the same overarching political and economic system (e.g., democracy and capitalism). “One Country, Two Systems” is far more radical: it allows for two fundamentally different socio-economic ideologies—Socialism with Chinese Characteristics and free-market Capitalism—to coexist under a single, unitary sovereign power. The “One Country” aspect (sovereignty) is considered paramount and non-negotiable by Beijing, while the “Two Systems” part is the conditional arrangement.
This term is almost exclusively used in formal contexts related to politics, law, and international relations. You would not use it in casual daily conversation unless the topic is specifically about the governance of Hong Kong, Macau, or Taiwan.