It remains to be seen whether Edward Snowden, who revealed in Hong Kong details of the US' Prism spying program, will be accepted as an asylum seeker by Iceland. It will also be interesting to see what action China may take as Iceland ponders the Snowden asylum question.

Edward Snowden.[File photo]

Now that Snowden is at the center of a global media firestorm, he represents both an opportunity and a challenge to the Chinese government, especially in the immediate aftermath of the summit meeting in California between Presidents Xi Jinping and Barack Obama where cyber security was of particular concern to the American side.

"His [Snowden's] actions present China with a great opportunity to abate American accusations of Chinese hacking," said Da Wei, an expert specializing in Sino-U.S. relations. "At the same time, his arrival poses questions to both Hong Kong and the Chinese mainland. Hong Kong has an agreement with the U.S. on extradition."

Da Wei said that China's motivation to further probe Snowden's revelations lies in its desire to gain an edge as it looks to hit back at U.S. allegations of hacking. China's action, though, whatever form it takes, will impact on many areas, especially the concept of "one country, two systems" and Sino-U.S. relations.

"One country, two systems" is a construct conceived by Deng Xiaoping, the former leader of the CPC and architect of the policy of reform and opening-up. The principle of "one country, two systems" has granted Hong Kong a high degree of autonomy.

Taking into account these problematic factors, China will have much to ponder before it can consider taking a stance on Snowden's destiny.

Commenting on how to handle the "one country, two systems" issue, Da Wei said it is a strategically important question, since there are many legal and diplomatic issues at stake.

"If China plays it cool, it will be an opportunity; If China fails to handle it with a light touch, it will be big trouble," he said.

Hong Kong has an extradition treaty with the U.S. government, but Hong Kong has no authority over diplomacy and national security. This means that the Chinese government faces a delicate balancing act if it wishes to avoid being criticized for violating the "one country, two systems" principle.

It is still unclear where the Snowden story will go from here. One thing, though, is certain. The "one country, two systems" question continues to loom large in the foreground and will do so until Snowden's destiny is resolved.