Hong Kong, “The Key to the Lock of the World” Report

By Dr. Frank J. Collazo

December 28, 2007

Hong Kong and its Territories

Introduction to History:

Hong Kong and Kowloon

The city of Hong Kong, left, faces Victoria Harbor on the northern part of Hong Kong Island. Kowloon, right, is situated across the harbor on the mainland. Both are part of the Hong Kong Special Administrative Region (SAR) of China.

Yang Liu/Corbis

Hong Kong, administrative region of China, consists of a mainland portion located on the country’s southeastern coast and about 235 islands. Hong Kong is bordered on the north by Guangdong Province and on the east, west, and south by the South China Sea. Hong Kong was a British dependency from the 1840s until July 1, 1997, when it passed to Chinese sovereignty as the Hong Kong Special Administrative Region (SAR).

British control of Hong Kong began in 1842, when China was forced to cede Hong Kong Island to Britain after the First Opium War. In 1984 Britain and China signed the Sino-British Joint Declaration, which stipulated that Hong Kong return to Chinese rule in 1997 as the Hong Kong Special Administrative Region (SAR) of China. The Joint Declaration and a Chinese law called the Basic Law, which followed in 1990, provide for the SAR to operate with a high degree of economic autonomy for 50 years beyond 1997.

The first permanent settlement in what is today Hong Kong probably occurred about 2,000 years ago during the Han dynasty (206 bc-ad 220). Little growth took place until the 19th century, owing to China’s imperial policy of inward development, with a focus away from developing the resources of coastal areas. Also, despite Hong Kong’s proximity to the port city of Guangzhou, all foreign trade with China was controlled through a small Chinese merchant guild in Guangzhou known as the Co-Hong, and contact with foreigners was highly restricted.

The British, who wished to expand their trading opportunities along China’s coast, became interested in Hong Kong in the early 19th century. They also desired a location to serve as a naval re-supply point, similar to the role Singapore was playing at the southern tip of the Malay Peninsula. The trade of opium, a highly profitable product for British merchants and eventually an illegal import into China, led to the Opium Wars and Britain’s acquisition of Hong Kong. In 1839, the Chinese Special Commissioner imprisoned some British merchants in Guangzhou and confiscated opium warehouses. The merchants were released, but the British foreign secretary, Lord Palmerston, dispatched naval forces and war ensued. The British had a superior naval force and won easily, occupying Hong Kong Island in 1841.

One year later, China and Britain signed the Treaty of Nanjing (Nanking) that ceded Hong Kong Island and adjacent small islands in perpetuity to Britain. Treaty disputes and other incidents led to the Second Opium War in 1856, also won by Britain. The conflict ended with the ratification of the Treaty of Tianjin in 1860. Among other provisions, this treaty ceded 10 sq km (4 sq mi) of the Kowloon Peninsula to Britain, thereby allowing the British to establish firm control over the excellent natural harbor between Hong Kong Island and the Kowloon Peninsula. In 1898 China leased the New Territories to Britain for 99 years, adding more than 900 sq km (350 sq mi) of land and considerable territorial waters to Hong Kong.

Hong Kong grew slowly during the 19th century, although gaining the New Territories added a substantial rural population. By 1900 there were perhaps as many as 100,000 people. The territory began to grow more rapidly in the 20th century as employment in Hong Kong’s developing light industries attracted Chinese immigrants. Instability in China associated with the Republican Revolution of 1911 and World War I (1914-1918) also stimulated Chinese to move to Hong Kong. This wave of population growth was halted during World War II (1939-1945) when Japanese forces invaded and occupied Hong Kong for almost four years. After the war Hong Kong had a population of about 600,000 people. A new wave of population growth occurred when Chinese immigration resumed after World War II and a growing civil war in China further prompted migrants to move to Hong Kong. By 1947 the population had reached about 1.8 million.

Hong Kong’s greatest growth and development occurred after the Communist takeover of China in 1949, when the commercial and shipping functions of Guangzhou and Shanghai shifted to Hong Kong. In addition, new industrial investments based on low-cost and productive labor led to rapid expansion of industrial employment. Although, officially cut off from easy ties with China during the early decades of the Communist regime, trade and travel between Hong Kong and China in fact flourished. Hong Kong served as China’s window to the world during the Chinese administration of Mao Zedong. After Mao’s death in 1976, Hong Kong’s role as a banker to China, and as its supplier of information, technology, and capital, intensified.

In the 1980s the impending 1997 expiration of Britain’s lease of the New Territories necessitated negotiations between Britain and China. Britain agreed to return all of Hong Kong to Chinese sovereignty at the end of the lease and the Sino-British Joint Declaration was signed in 1984. Despite the change in Hong Kong’s political status to a Special Administrative Region (SAR) of China on July 1, 1997, the territory has continued to strive to maintain its economic role and the confidence of the world community in its banking, trading, and shipping.

Tung Chee-hwa served as the Hong Kong SAR’s first chief executive from 1997 to 2005; he resigned before the end of his second term in 2007, citing health reasons. His deputy, Donald Tsang, took over as acting chief executive until a successor could be determined. Tsang won nominations from 710 of the 800 election committee members and was formally named chief executive in June 2005. Tsang was appointed to serve out the remaining two years of Tung’s term, rather than to a full five-year term.

First Opium War

The breakup of the EEIC monopoly was the immediate cause of the First Opium War, both because it led to a huge increase in opium traffic and because, without the EEIC to serve as a buffer, the British government now found itself obliged to intervene more frequently in China. A vocal part of the English public clamored for greater access to China’s huge market, and Britain often sought these goals through bluster and the threat of force.

China saw the problem differently and moved to stem the trade imbalance and the opium craze that plagued its people. In late 1838 the Chinese appointed a famed official, Lin Zexu, as imperial commissioner and sent him to Guangzhou to solve the problem. In March 1839 Lin ordered the British merchants to hand over all of their opium stocks within three days and to sign a bond pledging never again to traffic in the drug under penalty of death. When British superintendent of trade Charles Elliot attempted to negotiate, Lin suspended trade and held all foreign merchants hostage. Elliot then ordered the merchants to hand over their opium to him, after which he surrendered it to Lin. Lin washed some 9 million Mexican silver dollars worth of opium into the sea, not realizing that English patriots would view this as destruction of Crown property.

While Lin and the British merchants jousted over the signing of the bonds, officials in England dispatched an armed force to China. The Chinese had prepared for war at Guangzhou, but the British force simply blockaded that city on its way north toward the capital of Beijing, where officials met with the Chinese. The result of subsequent negotiations was the Convention of Quanbi in January 1841, in which the bare minimum of British demands were met. The agreement was subsequently rejected by both sides: The emperor was enraged that his representative had made real concessions, while the British felt that Elliot had failed to press his advantage.

Sir Henry Pottinger replaced Elliot in August 1841 and immediately directed his forces to occupy important cities along the coast, including Ningbo and Tianjin. In the spring of 1842 the English renewed their offensive, triumphing readily over valiant but under armed Chinese resistance. By late June, the British occupied Zhenjiang, an important communication center and entry to the Grand Canal, the artery by which rice from the southern regions reached the northern capital. The Chinese agreed to negotiate, and at gunpoint they signed the Treaty of Nanjing (Nanking) on August 29, 1842. The treaty more than fulfilled England’s original goals: The cohong was abolished, four more Chinese ports were opened to trade (Fuzhou, Ningbo, Shanghai, and Xiamen), and the island of Hong Kong was ceded to the British.

The Second Opium War

The Second Opium War was in many ways an inevitable sequel to the first. The Chinese were not eager to implement the terms of a treaty that they saw as unfair. Still, skillful Chinese diplomacy and a number of other political distractions kept the conflict from boiling over for a number of years. On the British side, merchants were unhappy because they did not see a spectacular rise in profits from the China trade after the First Opium War; they blamed their disappointment on Chinese foot-dragging. In addition, the Treaty of Nanjing did not address the opium issue. Opium smuggling continued, and this only increased Chinese resentment of the foreigners.

The Arrow Incident of 1856 was the spark that ignited the Second Opium War. The Arrow was a ship owned by a Chinese resident of Hong Kong, and it was registered with the British there. On October 8, 1856, Chinese officers searching for a notorious pirate boarded the ship—without British permission—while it was docked off Guangzhou, hauling down the British flag as they did so. This minor incident quickly escalated into a shooting war.

The British sent an expedition to seek redress and were joined by a French task force. (A French missionary had been murdered in inland China in February 1856.) After some delay, the joint force took Guangzhou in December 1857 and then moved north to threaten the capital once again. By June 1858 the superior power of the Europeans and their refusal to compromise culminated in the signing of the Treaty of Tianjin, the most important term of which was the right of foreigners to establish permanent diplomatic residence in China’s capital. The treaty also opened ten new ports to foreign trade.

When the foreigners returned to ratify the treaty the following summer, however, angry Chinese forces opened fire, killing more than 400 British men and sinking four ships.

A much larger Anglo-French force returned a year later, in August 1860, and invaded the Chinese capital, sending the imperial court into flight and burning the Summer Palace. On October 24, 1860, British leaders forced the Convention of Beijing on the defeated Chinese, establishing once and for all the right of foreign diplomatic representation in China’s capital. Many restrictions on foreign travel within China were removed, and missionaries received the right to work and even own property in China. The opium trade, the catalyst for the whole dispute, was legalized.

Significance

The Opium Wars are extremely important to China’s modern history. The wars, and the unequal treaties forced on the Chinese by the West, compromised China’s sovereignty and weakened the country’s political institutions during a crucial period in its history. The events contributed to the collapse of the Qing dynasty—the country’s last imperial dynasty—in the early years of the 20th century. Although some historians have argued that the conflicts constituted a painful but much needed jolt to shake China out of time-bound traditions, the Chinese look back on the Opium Wars as a cruel and greedy exercise in “might makes right.”

Hong Kong Transition

The 6 million British colonial citizens of Hong Kong, a moment of truth—arguably the most important that they have ever had to confront—was to arrive at midnight on June 30, 1997. On that day their prosperous territory, which has been under the generally benign governance of the faraway British parliament since 1842, was to change hands.

Under the terms of a solemn treaty signed nearly a century ago, the territory was to pass into the control of the country from which many of the present inhabitants fled as refugees from the People's Republic of China. The British territory was to become, in other words, Chinese. The bastion of capitalism was to fall, under the authority of Communists. Six million people, whether they liked it or not, were to watch their nationalities and their citizenships and their futures change in the blink of an eye.

From China's perspective, the event was a satisfactory end to more than a century of humiliation in which a foreign power—Great Britain—had illegal control of a significant bit of its land. China regarded that land as inalienably Chinese territory. From the perspective of Britain, which has seen its empire shrink, territory by territory, for the best part of the last 50 years, the handing-over of Hong Kong was something to be regretted, although it was not unexpected.

During the last century and a half, Hong Kong has languished and prospered under a significant degree of personal liberty. There has been a fair and just legal system, a properly regulated commercial system, and some semblance of democracy. And under this arrangement most residents of Hong Kong have managed to achieve a standard of living and education utterly unknown in China. For example, in 1990 the literacy rate in Hong Kong was virtually 100 percent; in China, some 182 million people out of an estimated population of about 1.2 billion could not read or write.

The British colonial period was partly responsible for the many freedoms that existed in Hong Kong—freedom of the press, of religion, of association, of speech—its coming end was a cause for grave concern.

1989 Tinnanmen Square Massacre Impact on Hong Kong

Few in Hong Kong can forget, for instance, the tragedy of the 1989 Tinnamen Square massacre in Beijing, the capital of China, when China's People's Liberation Army crushed a prodemocracy rally. Hundreds of demonstrators were killed. Most in Hong Kong know how harshly China is accustomed to dealing with those who stand up against Communist authority. Most are aware of the alarmingly high degree of corruption—both official and unofficial—within the People's Republic.

Different Societies

It will be a challenge for Hong Kong and China—two societies that have evolved over the last 150 years into entities that are dramatically different from each other—to unite and create a blend of the two ways of life. The future, for so fragile a place as tiny Hong Kong, is uncertain indeed. The handover had been anticipated for a long time—anticipated, but until lately, rarely spoken about.

The Tea Connection

The link between the innocent cup of tea, and today's alarm over the future of Hong Kong, goes like this: The first tea imported into Britain came from China via the Portuguese, who had a trading post in their colony of Macao on the southeastern coast of China.

In the 1680s ships brought sacks of the dried leaves up from Lisbon, the capital of Portugal, to the port of London, where they were sold at a tiny and fashionable café called Garway's Coffee House. It was an instant hit: Londoners fell upon the new drink with unbridled enthusiasm.

Before the demand was so huge, it was decided that Britain should import the tea itself, rather than let the Portuguese act as the middlemen. The only entity then capable of doing business with the Chinese was the East India Company, based in the eastern Indian city of Calcutta, which promptly sent ships to the Chinese port of Guangzhou (Canton) and asked to buy some tea.

The Chinese merchants were happy to oblige—but they would only accept metal in payment for it: gold, silver, or copper bars. They did not want any of what they considered the worthless paper bills that were customarily offered by Westerners in payment. The British agreed, and a healthy trade began.

The financial arrangement then ran for many years—until the time came when the demand for tea back in England was so huge that the East India Company ran out of metal with which to pay.

Late into the first half of the 19th century, however, the Chinese began to balk at the arrangement. The emperor in Beijing objected at the notion of “foreign mud” being imported and causing addiction among his subjects. He ordered action from his viceroy in Guangzhou, where the Indian opium was being imported—largely through a firm of Scottish grocer-traders, the Jardines and the Mathesons. After some hesitation the local authorities did indeed act, confiscating hundreds of boxes of the drug and, as today, burning them.

The British traders were enraged, and looked to their faraway government for help, which came in the shape of a squadron of fast ships, dispatched to China for the purpose of insisting on Britain's rights to free trade. The first of the so-called Opium Wars was joined, and the Chinese, militarily backward after centuries of self-imposed isolation, lost. The British were in a position to exact retribution and as was common in Britain's imperial heyday, they decided that, in addition to shiploads of silver bullion and a treaty promising respect, they would get what they liked best of all—land.

Specifically, under the terms of the famous 1842 Treaty of Nanking (Nanjing), they wanted sovereign control over the island of Hong Kong. A disappointed London politician described the island as “a barren rock, with hardly a house on it.” But barren or not, it was ceded in perpetuity: It became the newest part of the fast-expanding British Empire. Winston Churchill, Great Britain's prime minister in the 1940s and 1950s, later described Hong Kong as “the key to the lock of the world.”

Treaty of Nanjing, August 29, 1842

The Treaty of Nanking was the first of three treaties between Britain and China.

Brought to the negotiating table by the Opium War, China agrees to open up more ports to foreign trade, ends the tributary system, yields Hong Kong to Britain, and agrees to pay war damages. An unequal treaty, China gets nothing in return, although opium remains illegal.

Treaty of Tientsin (Tianjin)

The second, the Treaty of Tientsin (Tianjin), forced on the Chinese in 1861 after they had taken a further drubbing at the hand of British forces, gave Britain control of a section of the Chinese mainland just across from Hong Kong island, and known as Kowloon (Nine Hills).

Japanese Conquests in Asia

Under the circumstances it was inevitable that the British should intensify the fortification of Hong Kong, which became legitimate on the expiration of the Washington Naval Treaty at the end of 1936. A $25,000,000 defense program has been enlarged and rushed toward completion. Artillery and machine-gun emplacements have been strengthened and concealed hangars built, while civilians have been recruited for volunteer military and first aid work which will supplement that of the regular forces. Military roads, trenches and concealed munitions dumps have been constructed; a new anti-aircraft defense system evolved; and a force of six battalions of troops and 300 first-line planes established in the territory.

Yet despite these measures, Hong Kong is no longer considered an important strategic outpost of the Empire. In case of a world war in which Britain and Japan were involved, it is generally agreed that the imperial defense line would be withdrawn to Singapore, and that Hong Kong's military importance would be limited to delaying action against an enemy advance. Hence the future of the colony, which contains nearly $100,000,000 in British investments, is far from secure. Even without a war, these investments would be ruined if the Japanese were permanently to cut off Hong Kong's intercourse with the Chinese hinterland.

Despite a previous warning from both the French and British that any attempt to occupy the Island of Hainan would lead to undesirable consequences, the Japanese on Feb. 9, pleading military necessity, seized this island. Hainan lies directly athwart the line between Singapore and Hong Kong, not far from the French naval base at Cam Ranh in French Indo-China. The Japanese had bombed the island in September 1938, and following protests from the French Government declared it would be secure from further attack provided France would allow no military supplies destined for China to move through Indo-China. The French agreed. The occupation of Hainan opens the way for a direct thrust at Indo-China itself, and for this reason has been a source of anxiety to the French Government.

Trade with Canton naturally dropped rapidly after that city fell to Japan, for the invaders soon won complete control over rail and river communications between the two cities. But since the fall of Shanghai, Hong Kong had become China's principal entry port, and the traffic continued by other routes. Coastal steamers carried cargo to and from the treaty ports of Swatow, Amoy and Foochow, the Portuguese colony of Macao, and French Kwangchowan. The great China tea market was transferred from Shanghai to Hong Kong. Because of these developments, Hong Kong's exports of merchandise were as high in the first six months of 1939 as in the same period of the record year 1938, while its imports declined by only 12 per cent.

The life of this small but important British colony was dominated during 1940 by two wars — one in Europe and one in Asia — which tended to converge into a single great struggle as the bonds between Japan and the Axis were drawn closer. Approximately 1,000,000 Chinese refugees continued to subsist in the territory, a few living on the riches they had brought with them and the rest relying on public and private charities. Their presence intensified the potential difficulties of importing adequate foodstuffs and raw materials and finding markets for the colony's exports.

These problems, not serious in normal times, became more pressing as Japanese troops moved southward in increasing numbers. In 1939 the invading forces had occupied all the Chinese territory paralleling the Hong Kong land border; in 1940 they penetrated into Indo-China under agreement with representatives of the French government at Vichy. More and more completely Hong Kong assumed the aspect of an isolated outpost of empire, subject to blockade by land and sea and, in the long run, indefensible.

In the vast area of land and ocean they had marked for conquest, the Japanese seemed to be everywhere at once. Before the end of December, 1940, they took British Hong Kong and the Gilbert Islands (now Kiribati) and Guam and Wake Island (U.S. possessions), and they had invaded British Burma, Malaya, Borneo, and the American-held Philippines. British Singapore, long regarded as one of the world’s strongest fortresses, fell to them in February 1942, and in March they occupied the Netherlands East Indies and landed on New Guinea. The American and Philippine forces surrendered at Bataan on April 9, and resistance in the Philippines ended with the surrender of Corregidor on May 6.

Thailand Support Japan in WWII

In 1940 Thailand fought a brief war with French Indochina, which had become cut off from France as a result of World War II. With Japanese mediation, the Thai government regained the territories in Laos and Cambodia that had been ceded to France in 1904 and 1907. On December 8, 1941, Japanese troops landed on Thailand’s southern coast. This was around the same time that the Japanese launched attacks on Pearl Harbor, Midway, Guam, Manila, Hong Kong, and other sites.

After tense meetings with the Japanese and his cabinet, Phibun agreed to allow the Japanese to move their troops through Thailand to invade and occupy the British-controlled Malay Peninsula, Singapore, and Burma. In January 1942, Thailand declared war against Britain and the United States. In 1943, Japan rewarded the Phibun government for its cooperation with the Japanese by awarding Thailand part of the territory that had been incorporated into British Burma in 1885 and the four Malay states that Siam had been forced to cede in 1909.

Hong Kong Flu

Scientists succeeded in reconstructing the 1918 influenza virus in 2005 after finding samples of the virus in the preserved tissues of three people killed by the Spanish flu. The scientists concluded that it was an avian flu virus that spread directly to humans. The virus penetrated deep into human lung tissue, causing a type of pneumonia that was capable of killing the young and healthy.

In 1957, a flu outbreak occurred in Guizhou, a province in southwestern China. Within six months, most areas of the world were battling what became known as Asian flu. Before the 1957-1958 pandemic subsided, an estimated 10 to 35 percent of the world’s population had been affected. The overall mortality rate, however, was comparatively low.

About a decade later, a variant of the virus that caused the 1957-1958 pandemic originated in either Guizhou or Yunnan province in southern China. The variant was first isolated and identified in Hong Kong in July 1968. Within a few months, cases of this Hong Kong flu appeared around the world. Hardest hit by the pandemic were children under age 5 and adults aged 45 to 64. In the United States, an estimated 30 million people were infected and there were some 33,000 influenza-related deaths.

Land and Resources

New Territories, Hong Kong

In 1898 Britain leased from China a large area of agricultural land and surrounding waters and added it to Hong Kong. The British named the region the New Territories and developed the area into numerous new towns. In 1984 Britain agreed to return the New Territories and the rest of Hong Kong to China upon the expiration of the lease in 1997.

Jodi Cobb/National Geographic Society

Geography

The total land area of Hong Kong is small, comprising only 1,092 sq km (422 sq mi), about two-thirds the size of Long Island, New York. The surrounding territorial waters cover 1,830 sq km (707 sq mi). Hong Kong’s mainland portion consists of the urban area of Kowloon and a portion of the New Territories, a large area that became part of Hong Kong in 1898. Lantau Island (also called Tai Yue Island), ceded to Hong Kong as part of the New Territories but often considered separate from that region, is the largest island. Located about 10 km (6 mi) east of Lantau Island and across Victoria Harbor from Kowloon is Hong Kong Island. The city of Hong Kong (also known as Victoria) faces the harbor on the northern part of the island. The city is the site of the SAR government offices and the chief business district, known as Central.

Topography

Despite the small size of the Hong Kong SAR, the topography is varied and rugged because it is largely folded mountains. There are more than 20 peaks over 500 m (1,640 ft), and the tallest, Tai Mo Shan in the New Territories, rises to 957 m (3,140 ft). Hong Kong’s greatest asset is its deep and well-protected harbor between Hong Kong Island and Kowloon. Level land for development is scarce. Less than 15 percent of the land is developed because of the rugged terrain. Land reclamation schemes began in the mid-19th century and they continue to be important means of acquiring new land for urban development. Examples of reclaimed land include stretches of coastline on either side of Victoria Harbor.

The only significant river is the Sham Chun, a small river that forms the northern border with Guangdong; all other drainage is small streams. The lack of sufficient drinking water is a serious problem; more than 80 percent of Hong Kong’s potable water comes from Guangdong.

Busy Aberdeen

A sampan makes its way through Aberdeen harbor on the southwest coast of Hong Kong Island. A haven for pirates two centuries ago, Aberdeen gradually evolved into a fishing community that continues to attract people to its floating restaurants. Today, it is home to thousands of boat dwellers.

Porterfield-Chickering/Photo Researchers, Inc.

Climate

Hong Kong’s climate is subtropical and monsoonal. The average daily temperature range is 26° to 31°C (78° to 87°F) in July and 13° to 17°C (55° to 63ºF) in February. Rainfall averages 2,159 mm (85 in) a year. Summers, which last from May to September, are long, hot, and humid. Typhoons regularly cross Hong Kong in summer and autumn. These powerful storms bring violent winds and extremely heavy rains that occasionally cause flooding and landslides. The winter, lasting from December to March, is cool and drier.

Rain Fall

The heavy rainfall washes away many nutrients from the soil, making it generally thin, poor, and unsuitable for intensive agriculture. Moreover, there is little available land for farm cultivation. Most of the original forest vegetation was long ago cut or burned and replaced with grasses or planted tree species such as pine and eucalyptus. Wooded hills now account for about one-fifth of the land area, whereas grasslands, badlands, and swamps make up more than one-half.

Bird Species

Hong Kong, in association with the World Wide Fund for Nature, maintains an important marsh reserve for birds, Mai Po, along Hau Hoi Bay (also called Deep Bay) and the river boundary with Guangdong. Mai Po attracts about 260 bird species, among them numerous ducks, wading birds, kingfishers, warblers, and marsh harriers. The reserve is an important stopping point for migratory birds flying between Siberia and tropical Southeast Asia and Australia. In addition to birds, Hong Kong has numerous small mammals and reptiles.

The People of Hong Kong

Street Scene, Hong Kong

Much of Hong Kong’s population is concentrated on Hong Kong Island and across Victoria Harbor in Kowloon. Population densities there reach as high as 40,000 people per sq km (100,000 per sq mi), among the highest in the world.

Ron Giling/Panos Pictures

Population Density

At the time of the 1991 census, Hong Kong had a population of 5,674,114. The 2006 population was 6,940,432, indicating a population density of 7,018 persons per sq km (18,176 per sq mi). The population is unevenly distributed, however, with the greatest concentrations of people in Kowloon and across the harbor on Hong Kong Island. Some districts, such as Mong Kok in Kowloon, have population densities of about 40,000 persons per sq km (about 100,000 per sq mi), among the highest urban densities in the world. Although birth and death rates are comparatively low in Hong Kong, migration from other parts of China creates a high population growth rate, and migrants now make up about 40 percent of the population.

Ethnic Groups

About 98 percent of the people are ethnic Han Chinese. Of these, 90 percent speak the Cantonese dialect of Chinese and come from southern China, or are descendants of people who originated there. The remaining 10 percent of Han Chinese come from other regions of China and speak other Chinese dialects. About 2 percent of the total population comes from or have ancestors who came from foreign countries, most from Southeast Asia. Many people practice ancestral worship, owing to the influence of Confucianism, but all major religions are represented. Chinese and English are Hong Kong’s official languages.

From 1984 to 1997, due to the uncertainty of the transition back to China, thousands of well-educated and wealthy Hong Kong citizens moved to countries such as Australia, Canada, and the United States, where they obtained permanent residency status or citizenship. However, many returned to Hong Kong after their initial emigration.

Hong Kong Housing

Densely packed high-rise apartments in Hong Kong demonstrate population pressures that shape the city and other urban centers, especially in the developing world. Large numbers of people from rural backgrounds, many from mainland China, come to Hong Kong seeking work.

Jonathan T. Wright/Bruce Coleman, Inc.

Urban Reconstruction

In 1973 the Hong Kong government began a massive program of housing construction and industrial relocation in the New Territories. The program is an attempt to lessen the crowding of Kowloon and the Central district of Hong Kong Island, and to reduce the demand for transportation by building planned communities near employment centers. Since many people in Hong Kong prefer living near their workplace, this approach has helped to accommodate Hong Kong’s large population on its small area of land.

Chinese New Year in Hong Kong

Parade participants wear costumes in the form of mythical creatures as part of the Chinese New Year Parade in Hong Kong. The Chinese New Year is also known as the Spring Festival and takes place between January 21 and February 19, depending on the lunar calendar. Celebrations begin with several days of cleaning to show the kitchen god special respect. Popular communal events include the dragon and lion dances, which take place in the street.

Kevin Fleming/Corbis

Education System

Education is free and compulsory for all children from the age of 6 to 15, and adult literacy is over 90 percent. Only a small percentage of high school graduates attend college or university on a full-time basis, however. There are seven colleges and universities, including two polytechnic schools. The largest and oldest institution of higher learning is the University of Hong Kong, founded in 1911. The Hong Kong Academy of Performing Arts offers courses in dance, music, theater, and technical arts. There are also more than a dozen technical institutes, technical colleges, and teacher-training colleges, which have large numbers of part-time students.

Dragon Boat Festival

To the cheers of spectators crowding the harbor, competing boats with as many as 50 paddlers each skim the water during the Dragon Boat Festival races, held each June. The races commemorate the heroic suicide of Qu Yuan, a respected 3rd-century-bc scholar who threw himself into a river when his earlier predictions of political disaster—ignored by the emperor—came true. The races emulate the actions of the inhabitants of Qu's village, who rowed their boats out onto the river upon hearing of his tragic death.

Alain Evrard/Photo Researchers, Inc.

Cultural Attractions

Hong Kong has a variety of cultural attractions and activities. The Hong Kong Arts Festival and the Hong Kong International Film Festival are annual events. Professional music companies include the Hong Kong Philharmonic Orchestra, the Hong Kong Chinese Orchestra, and the Hong Kong Dance Company. The territory has a thriving film and television industry. One of Hong Kong’s most popular actors is Jackie Chan, who is known for his starring roles and stunts in action movies. Hong Kong Disneyland opened in September 2005.

Customs of Hong Kong, Marriage and Family

Men and women choose their own spouses. Couples tend to marry later (in their mid- to late 20s) than in many countries. A large banquet is the highlight of the elaborate wedding celebration. The banquet is often held after an afternoon of "mah-jongg", a tile game that is a cross between dominoes and cards.

Chinese family members are bound by a strong tradition of loyalty, obedience, and respect. Hong Kong has one of the lowest divorce rates in the world. While families have traditionally been large, a trend toward smaller families is clear. Chinese do not usually display affection in public, but this is changing among the younger generation. A source of stress for many families in Hong Kong is the sharp difference between traditional values and modern practices. The decision of many to leave Hong Kong before China took control in summer 1997 also strained the traditionally strong family.

Eating

Rice is the staple food. Chinese dishes are often prepared with pork, chicken, and vegetables, but seafood is the most common ingredient in Hong Kong cooking. A large variety of fruit is also available. Business is often conducted during lunch or dinner. Lavish restaurant meals are traditional for weddings and other special events.

The Chinese use chopsticks for eating most meals, and visitors should always try to use them when being entertained in a Chinese home or restaurant. Dishes of food are placed in the center of the table, and the diners serve themselves by taking portions of food with chopsticks and placing the food in their individual bowls of rice. It is proper to hold the rice bowl close to the mouth when eating. A host will refill a guest’s bowl until the guest politely refuses. Although Chinese restaurants are in the majority, many different types of cuisine are available in Hong Kong, including French, Mexican, German, Italian, and Japanese. American, Thai, and Vietnamese styles of food are also popular.

Socializing

A handshake is a fairly usual form of greeting. In Chinese, the surname comes first in a name of two or three words, unless a person is addressing one of the many Hong Kong Chinese who have Westernized their names.

On most occasions when a gift would be appropriate (such as weddings, festivals, and the Chinese New Year), the usual gift is money in a red envelope. At the Chinese New Year, single people receive envelopes of money from their families, and it is traditional for a guest to bring a gift of fruit or candy for the host. People offer and receive all gifts with both hands. It is important to show respect for one’s hosts and their home; this is done not only through good manners, but also by maintaining good posture. It is always polite to compliment one’s hosts, who are likely to say that they are not worthy of the praise. As in many countries in the region, age is revered and older people should be treated with particular respect.

Recreation

Films and television are perhaps the most popular forms of entertainment. Favorite sports include soccer, swimming, table tennis, skating, squash, tennis, basketball, and boating. Major spectator events include the Seven-a-Side Rugby Invitation Sevens, the Open Golf Championship, and the Super Tennis Classic. Hong Kong’s passion, however, is horse racing, the only legal form of gambling. Races are organized by the Royal Hong Kong Jockey Club and held at Sha Tin in the New Territories and in Happy Valley on Hong Kong Island between September and May.

Holidays and Celebrations

Chinese holidays are based on the lunar calendar and thus fall on different days of the Gregorian calendar each year. Although the International New Year is observed on 1 January, the celebrations for the lunar, or Chinese, New Year in late January or early February are far more exuberant. There are many beliefs and traditions associated with this holiday, which lasts around two weeks, although most people go back to work after three or four days of revelry. Some of the most widespread practices include making offerings to household gods, cleaning house, wearing new clothes, settling personal debts, and feasting at large banquets. The color red and loud noise are two hallmarks of this celebration: Both are said to drive off devils and wild beasts. Another custom is to write messages of prosperity and longevity on red paper and display them on doorways. It is a tradition in Hong Kong to go to flower markets after a New Year’s Eve feast.

Sometime in March or April, the birthday of Kuan Yin, the Buddhist deity of mercy, is celebrated. The holiday is observed mainly by women, who may make pilgrimages to Kuan Yin’s temple to pray and leave offerings of fruit, flowers, and cakes. The Ching Ming Festival in April is a time for honoring the dead.

The Tin Hau festival in May is a birthday celebration of Tin Hau, the Queen of Heaven and Goddess of the Sea. She is one of the most popular deities in Hong Kong and is said to protect against shipwrecks, sickness, and rough seas. Festivities on this day include parades, Chinese opera performances, and visits to Tin Hau’s temples on brightly colored vessels. In June the Dragon Boat Festival is celebrated with dragon boat races. Liberation Day is celebrated in August. The Mid-Autumn Festival is a harvest holiday celebrated with lanterns and moon cakes. On Chung Yeung in October, people tend the gravestones of family and friends, make offerings of food, and fly kites. In Hong Kong, it is believed that kites carry misfortune away into the skies.

Since the transfer of power in 1997, Hong Kong residents have celebrated two more holidays: Reunification Day in July and National Day in October. Christian holidays celebrated include Easter and Christmas Day (25 December). The day after Christmas, Boxing Day, is also observed.

Lifestyle

Hong Kong’s prosperous economy is reflected in the lifestyle of its people. They have one of the highest standards of living in all of Asia, and it is more than 30 times higher than China’s average standard of living. In 2004 Hong Kong’s per capita gross domestic product (GDP) was $23,680, although much of the wealth is concentrated into relatively few hands.

Economy

Hong Kong's Busy Streets

Bright signs and busy shops line Tsim Sha Tsui, a famous commercial district in Hong Kong. Located on the southern tip of the Kowloon Peninsula north of Hong Kong Island, Tsim Sha Tsui serves as Hong Kong's shopping and entertainment center, and features many hotels, bars, and shops. It is the terminal for the Star Ferry, which for a century provided the only public transportation to Hong Kong Island.

Will and Deni McIntyre/Photo Researchers, Inc.

Economic Development

Trade with Canton naturally dropped rapidly after that city fell to Japan, for the invaders soon won complete control over rail and river communications between the two cities. But since the fall of Shanghai, Hong Kong had become China's principal entrepôt, and the traffic continued by other routes. Coastal steamers carried cargo to and from the treaty ports of Swatow, Amoy and Foochow, the Portuguese colony of Macao, and French Kwangchowan. The great China tea market was transferred from Shanghai to Hong Kong. Because of these developments, Hong Kong's exports of merchandise were as high in the first six months of 1939 as in the same period of the record year 1938, while its imports declined by only 12 per cent.

Textile Industry Crisis

The six big-volume nations agreed to: a twelve-month ceiling on exports to become effective Oct. 1, 1961, at the level of the twelve-month period which ended on June 30, 1961; a special study to develop a long-term plan to be reported Apr. 30, 1962; a relaxation of import restrictions by nations that now impose them—mainly in Western Europe. The principal import increases fell to France and Italy; Japan received a slight increase. In a separate negotiation, Hong Kong was asked to accept a 30 to 35 per cent cut.

There were several clouds on the economic horizon for the colony. Its textile industry, which now provides close to 55 per cent of value of direct exports, was confronted with demands from the United States and the United Kingdom that it continue to impose voluntary quotas. The 'big three' of the textile industry associations, the Hong Kong Cotton Spinners' Association, The Federation of Hong Kong Cotton Weavers, and The Hong Kong Cotton Weaving Mills Association, continued through the summer to reject the idea of the quotas being extended beyond January 1962, but finally agreed to an eleven-month extension. The Hong Kong textile and garment industry was largely responsible for the growth of Tsuen Wan, a new industrial and commercial center within the colony's 398-square-mile area. Over half of the 570,000 spindles are in Tsuen Wan.

1969 Economic Crisis

Damage to the economy last year was not so bad as pessimists had feared. Foreign trade expanded by 9 percent, tourist arrivals were 4 percent higher, and although some money left Hong Kong this did not establish a trend. Sterling devaluation at the end of 1967 caused a flutter and a loss in London-held reserves. The Hong Kong dollar was also devalued, but by the smaller margin of about 7 percent. In June the British Treasury negotiated a new form of reserve asset that would protect the colony to some extent against the risk of further sterling devaluation—part of Hong Kong's reserves could be held in British bonds denominated in Hong Kong dollars. But there was some doubt in the colony as to the real value of this concession, and it was overtaken in the autumn by the Basel Agreement, under which all parts of the sterling area could gain protection, which was, if anything, better.

Harbor Tunnel between Victoria and Kowloon

In September work began on the long-discussed cross-harbor tunnel between Victoria and Kowloon. A British consortium of engineering firms was awarded the contract after a long delay in obtaining the necessary guarantees for the financial credit. Because the amortization for the tunnel would stretch into the period immediately preceding the end of the colony's 99-year lease from China in 1997, the problems of financing were obviously severe, and overcoming them consequently boosted the morale of the colony's business community.

Moreover, some residents of Hong Kong felt that the commissioning of the project would deter Peking from taking any drastic action against the colony pending its completion, because the tunnel will clearly add greatly to the value of the area. There is no bridge across the harbor, and traffic has hitherto had to rely on ferries. The next large-scale project will be the extension of the runway at Kai Tak Airport for the jumbo jets, a $15 million scheme for which the financing was also a problem

Water Shortage

During early 1964 the water shortage was so acute that residents could get water only every other day and then for only a few hours. Communist China, however, signed a new agreement to provide additional fresh water for the colony; and seven typhoons left the reservoirs full. For the first time in many years this British crown colony had no water shortage during 1965, as the agreement to buy water from the Chinese mainland seemed to work smoothly. However, three major crises kept the colony buzzing. The first was a run on the banks in the beginning of the year. Financial experts were at a loss to explain it, but the government was forced to impose restrictions on withdrawals that were not lifted until February 15.

Strategic Location

Hong Kong’s position as one of the world’s most important economic centers is based on several factors. It is located midway between Japan and Singapore, and it lies astride the main shipping and air routes of the western Pacific. It also has long served as a major port of entry and trade for China, which uses Hong Kong as a primary link to the world economy.

Trade

Furthermore, Hong Kong has a favorable atmosphere for business and trade. Despite the uncertainty associated with its return to China, which has a Communist government, Hong Kong continues to thrive economically and attract new migrants. Hong Kong’s economy has always been based upon commerce, trade, and shipping, and today it vies with Singapore as the world’s largest container port. Industry and tourism are also important, and agriculture continues to provide a significant share of the territory’s food and flower supplies, although Hong Kong must import the majority of its food.

Benefits of Free Trade

The last three decades have seen a significant improvement in living standards for hundreds of millions of people. Without exception, the countries in which living standards have improved most rapidly have substantially reduced trade barriers and increased their exports. Since 1970 Asia’s “four little tigers”—Hong Kong, South Korea, Taiwan, and Singapore—have been transformed from impoverished areas into some of the world’s richest areas. Many of their citizens now enjoy living standards comparable to those of the United States and Europe. Not coincidentally, these four entities are among the 20 largest traders in the world.

Agriculture

Farming is a declining sector, because of the shortage of suitable farmland. There are now less than 2,000 hectares (5,000 acres) under cultivation for vegetables and flowers, although these produce about one-quarter of the fresh vegetables consumed. Increasingly, farmers are growing premium food and flower varieties, which fetch higher market prices than the traditional rice crop. Pig farming is also important. Hong Kong’s fishing fleet is significant and contributes about two-thirds of the live and fresh marine fish consumed each year.

Stock Market

Hong Kong Stock Traders

Hundreds of traders keep close watch on their computer screens in one of Hong Kong's several stock exchanges. As a chief financial center, Hong Kong also serves as a vital intermediary on investment and foreign exchange between mainland China and the rest of the world.

Alain Buu/Gamma Liaison

Industrial Development

Manufacturing developed rapidly in the 1950s and grew to become the most important economic sector in the early 1980s, when manufacturing employment reached nearly 905,000. Hong Kong was a leading producer of textiles, plastics, rattan furniture, watches, and clocks. Manufacturing thereafter declined rapidly, however, as the economy of Hong Kong underwent major structural change. Manufacturers began shifting the location of their production facilities to neighboring Guangdong Province and other locations in China, where labor and land costs were much lower.

By the early 1990s industrial employment had declined to less than 575,000, and by 2005 it was about 185,000. However, the relocation of labor-intensive manufacturing to mainland China has been partially offset by the fact that many of the relocated businesses have continued to conduct export operations in Hong Kong. In addition, Hong Kong now manufactures goods that require a more highly educated and skilled labor force, such as electrical and electronic products. Most importantly, the services sector has experienced rapid growth, especially in finance, insurance, real estate, and business services, giving Hong Kong the sophistication of a metropolitan economy.

Hong Kong is among the leading trading centers in the world, and shipping and trade continue to be important aspects of its economy. The market is generally open and favorable to trade, and Hong Kong has been successful at balancing its imports and exports. Many of its exports are actually re-exports, products that are manufactured in other parts of China or other countries but distributed through Hong Kong. These products include clothing, textiles, telecommunications and recording equipment, electrical machinery and appliances, and footwear. Imports consist largely of consumer goods, raw materials, transportation equipment, and foodstuffs. Extensive trade occurs with other regions of China. In addition, Hong Kong’s leading international trading partners are the United States and Japan.

Fishing in Hong Kong

Fishing is an important source of income and trade for Hong Kong. Due to an extreme land shortage, the government must import most of its food supply. The residents in this photo are fishing in Aberdeen Bay near Hong Kong.

Benjamin Rondel/The Stock Market

Currency, Floating Hong Kong Dollar

The Hong Kong dollar was allowed to float at the end of 1974, after having been pegged to the U.S. dollar for the preceding 21 months. At about the same time, the so-called 'Basel agreement,' by which Hong Kong kept a proportion of its reserves in sterling in return for partial British guarantees against devaluation losses, was terminated by British Chancellor of the Exchequer Denis Healey.

The unit of currency is the Hong Kong dollar (7.79 Hong Kong dollars equal U.S.$1; 2004 ). The Hong Kong Monetary Authority performs the functions of a central bank and authorizes three commercial banks—the Bank of China, HSBC (formerly the Hong Kong and Shanghai Banking Corporation), and the Standard Chartered Bank—to issue Hong Kong dollars. The terms of the Sino-British Joint Declaration of 1984 allow Hong Kong to continue issuing its own currency until the year 2047.

Tourism

Tourism is one of Hong Kong’s most important service activities and it is the third largest source of foreign exchange earnings. Tourism dollars injected more than $7 billion into the Hong Kong economy each year of the early 1990s, when nearly 9 million tourists visited annually. In 2004, 13.7 million tourists visited Hong Kong. Most visitors came from Taiwan, Japan, Singapore, Malaysia, and other locations in East and Southeast Asia. Many European and North American tourists also visited.

Contract Bridge

Travel-with-Goren Company hosted two trips to the Orient, in which bridge stalwarts visited such Far Eastern cities as Tokyo, Hong Kong, and Bangkok, and one to the Caribbean. Tournament bridge provided the main source of entertainment as the luxury liners steamed to their various ports of call. The trips to the Orient were a combined air and naval operation as the tourists cruised to the Far East aboard the U.S.S. Roosevelt and returned by jet.

Seaports/Airports

In addition to its excellent deepwater port and extensive maritime connections, Hong Kong has one of Asia’s main airports, the Hong Kong International Airport. Located on the islet of Chek Lap Kok off Lantau Island, the airport opened in 1998, replacing the old Kai Tak International Airport. There is passenger and freight rail service to Guangzhou.

Highways

Hong Kong has an extensive network of roads in the New Territories, in Kowloon, and on Hong Kong Island. This network is supplemented by the Mass Transit Railway (MTR), which connects Hong Kong Island, Kowloon, and the New Territories. A 33-km (21-mi) electric trolley line operates on Hong Kong Island, and ferries shuttle between the mainland, Hong Kong Island, and all other major outlying islands.

Government

Hong Kong and Kowloon

Yang Liu/Corbis

Kowloon, administrative area of Hong Kong, forming a peninsula of the mainland China coast, across Victoria Harbor from Hong Kong Island. Kowloon is an important transportation, manufacturing, and tourist area, as well as a densely populated residential and commercial zone. It has a total area of 11.9 sq km (4.6 sq mi).

Kowloon is the site of Hong Kong Baptist University, founded in 1965, and two polytechnic institutions. There is a large mosque on the main commercial artery, Nathan Road, and several small parks, including Kowloon Park, where the Hong Kong Museum of History is located. The Hong Kong Cultural Center, the Space Museum, and the Hong Kong Museum of Art are located on the waterfront at the southern tip of the peninsula.

Regular and frequent ferry service connects Kowloon to Hong Kong Island. A motor vehicle and mass transit tunnel runs under Victoria Harbor. Kowloon was part of China until 1860, when it was ceded to Britain following China’s defeat in the Second Opium War (see Opium Wars). The British initially used the area to protect Victoria Harbor and stationed colonial troops there, but Kowloon also quickly developed important port facilities. More significant development of Kowloon occurred after 1898, when China leased the adjacent New Territories to Britain. This added a substantial population and land area to support commercial and industrial development in Kowloon. It also permitted urban expansion northward, beyond the original Kowloon region, to include the area called New Kowloon. By 1910 a railway had been completed between Kowloon and the Chinese city of Guangzhou, and Kowloon became an important transit point for trade and traffic with China. Port and storage facilities expanded, industrial growth soon followed, and Kowloon developed as one of several important manufacturing sites in Hong Kong. Since the 1950s, Kowloon has continued to grow and prosper as Hong Kong has developed into an important Asian market. Kowloon, like the rest of Hong Kong, returned to Chinese control on July 1, 1997. Population, including New Kowloon (1991) 2,030,683.

Prior to July 1, 1997, Hong Kong was a British dependent territory. A British-appointed governor, representing the British crown, headed the Hong Kong government and exercised authority over civil and military matters. An Executive Council advised the governor on important matters, and a 60-member Legislative Council (known as Legco) enacted laws and oversaw the budget. With the territory’s transfer to China in 1997, leadership passed from the last British governor, Chris Patten, to a Chinese chief executive, Tung Chee-hwa.

The terms of the transfer to China were based on a “one country, two systems” concept, under which Hong Kong is allowed a high degree of autonomy, charting its own course with the exception of foreign affairs and defense. The Hong Kong SAR is governed under a “mini-constitution” called the Basic Law, which guarantees that the capitalist system and way of life in Hong Kong will remain unchanged for 50 years after the transfer to China. Under the Basic Law, a chief executive, appointed to a maximum of two five-year terms, heads the government of the Hong Kong SAR. An election committee, whose members are appointed by China, selects the chief executive. The chief executive presides over the Executive Council, whose members assist the chief executive in policy-making decisions.

The lawmaking body of the Hong Kong SAR is the Legislative Council, which is comprised of 60 members who serve four-year terms. In the 2004 legislative elections 30 seats went to candidates who were directly elected by a system of proportional representation (in which seats are awarded to a political party in proportion to the number of popular votes it receives), and 30 seats were determined by elections within “functional constituencies” comprising professional and special interest groups. The judiciary of the Hong Kong SAR is independent, and laws are based on English common law and the rules of equity. Judges are appointed by the chief executive.

New Territories, area of Hong Kong that lies mostly on the mainland China coast north of Kowloon and south of Guangdong Province. The New Territories also includes Lantau Island (also called Tai Yue Island) and other surrounding smaller islands. The total land area of the New Territories is about 950 sq km (about 365 sq mi), and the surrounding territorial waters cover approximately 1,500 sq km (approximately 580 sq mi). The New Territories was leased by China to the United Kingdom in 1898; it was returned to China on July 1, 1997, along with the rest of Hong Kong.

In 1991, the New Territories had a population of 2,374,818accounting for nearly 42 percent of Hong Kong’s population. The overall population density is about 2,500 persons per sq km (about 6,500 per sq mi), although the people are unevenly distributed, with most living in a number of new towns on the mainland. These towns and industrial estates have been created to support industrial development in the New Territories and to decentralize the population from the more crowded areas of Kowloon and Hong Kong Island. Tsuen Wan was the first and largest of these new towns. Other rapidly growing ones include Tuen Mun, Sha Tin, Yuen Long, Tai Po, and Fanling.

The Chinese University of Hong Kong, founded in 1963, is located in Sha Tin. Lantau Island has several Buddhist monasteries, with Po Lin Monastery being the largest. Recreational facilities include the Sha Tin Racecourse, the Hong Kong Golf Club in Fanling, and an amusement park.

The British acquisition of the New Territories in 1898 set the stage for Hong Kong’s rapid growth during the 20th century. Since the 1950s, Hong Kong has established industrial zones, planned communities, and new port facilities in the New Territories. It has also expanded existing port facilities. Although farming has declined, there are still nearly 2,000 hectares (5,000 acres) of active farmland, which are used for poultry and egg production, and for growing vegetables and flowers.

There is a large container port at Kwai Chung and a new container terminal is planned for Lantau Island; it will connect to a river port terminal for the transshipment of containers to Guangzhou, a mainland city in Guangdong Province. A substantial road and highway network connects the major new towns of the New Territories, and the main rail line to Guangzhou links Lo Wu, Fanling, Tai Po, and Sha Tin to Kowloon. A light rail line connects Tuen Mun and Yuen Long in the western part of the New Territories. An international airport opened on Chek Lap Kok, an islet near Lantau, in July 1998. An express highway and railway link the new airport with the New Territories and Kowloon.

Farmers lived in the area that is now the New Territories before Britain leased the region from China in 1898 to create a buffer zone between Victoria Harbor and China proper. Britain sought the land less out of fear of China, than from concern over the rapid expansion of other colonial powers—Germany, France, Japan, and Russia—in China.

In addition to providing more space for an adequate military defense, the New Territories added a substantial rural population. The region also provided land for food and timber production, and a much-needed catchments area for fresh water supplies. In the 1980s the impending expiration of Britain’s lease on the New Territories necessitated negotiations between Britain and China, and the Sino-British Joint Declaration was signed in 1984. In it, Britain agreed to return Hong Kong to Chinese sovereignty on July 1, 1997.

Boat People

In September, British, Vietnamese, and UN officials reached agreement for the repatriation of Vietnamese asylum-seekers in Hong Kong. The agreement called for return of those who while 'not volunteering' were nevertheless 'not opposed to repatriation.' An estimated 54,000 Vietnamese currently lived in camps in the British colony and were ineligible for resettlement in the West. A previous voluntary return program, beginning in March 1989, had been moving slowly. In December 1989, 51 boat people were involuntarily repatriated from Hong Kong to Vietnam, in a move that drew international criticism. An accord between China and Britain to build a new airport in Hong Kong actually lessened the territory's autonomy by providing Beijing with a direct say in Hong Kong's domestic affairs. The first forced repatriation of Vietnamese boat people since 1989 began in the fall.

Fears of the Future

There were also calls for the more rapid introduction of democracy in the colony. British Foreign Secretary John Major announced in September that his government would give Hong Kong a bill of rights intended to preserve the freedoms China had agreed to retain for the territory and that it would work for direct election of half of the legislature by 1995. Political leaders have also called on China to delay the promulgation of the final Basic Law for post-1997 Hong Kong and to reconsider some of its provisions. Of particular concern was the plan to station Chinese troops from the People's Liberation Army in the territory after 1997, as provided both the draft Basic Law and in the Sino-British Joint Declaration on the Future of Hong Kong. Talks between Chinese and British officials on the future of the territory were to take place late in the year.

Hong Kong’s Future

After 143 years of colonial rule, Great Britain on September 26 initialed an agreement with China providing for China's resumption of sovereignty over Hong Kong on July 1, 1997, when Britain's lease over 92 percent of the territory's land area expires. Two years of negotiations were concluded with a 'joint declaration,' which stipulated that Hong Kong would enjoy a 'high degree of autonomy' in all areas except foreign affairs and defense, as a 'special administrative region' of China after 1997. Under the accord, to which China committed itself for a period of 50 years, the government of Hong Kong would be composed of local inhabitants, with an elected legislature, an independent judiciary, and a chief executive appointed by Peking. The current social and economic system in Hong Kong, as well as the territory's 'lifestyle,' would remain unchanged for the 50-year period. China hoped that this 'one country, two systems' formula could also be applied to Portuguese-administered Macao and to Taiwan.

Hong Kong Under Chinese Sovereignty

The Return of Hong Kong to China

NBC News Archives

Chris Patten

Chris Patten was the last British governor of Hong Kong, serving from 1992 until the territory reverted to Chinese rule in 1997.

Dennis Brack/Black Star

At the stroke of midnight, local time, on June 30, 1997, Hong Kong became a special administrative region of the People’s Republic of China, after more than 150 years as a British colony. Hong Kong was ceded to Great Britain when Great Britain defeated China in the First Opium War (1839-1842). Under the Sino-British Joint Declaration (1984), Great Britain agreed to return all of Hong Kong to China in 1997. Presented here are excerpts from a translation of the speech made by Chinese President Jiang Zemin at the flag-changing ceremony.

The national flag of the People's Republic of China and the regional flag of the Hong Kong Special Administrative Region of the People's Republic of China have now solemnly risen over this land.… This is both a festival for the Chinese nation and a victory for the universal cause of peace and justice.

Thus, July 1, 1997, will go down in the annals of history as a day that merits eternal memory. The return of Hong Kong to the motherland after going through a century of vicissitudes indicates that from now on, the Hong Kong compatriots have become true masters of this Chinese land and that Hong Kong has now entered a new era of development.

History will remember, former Chinese paramount leader, Mr. Deng Xiaoping for his creative concept of 'one country, two systems.' It is precisely along the course envisaged by this great concept that we have successfully resolved the Hong Kong question through diplomatic negotiations and finally achieved Hong Kong's return to the motherland….

On this solemn occasion, I wish to extend my cordial greetings and best wishes to the 6 million or more Hong Kong compatriots who have now returned to the embrace of the motherland.

After the return of Hong Kong, the Chinese government will unswervingly implement the basic policies of 'one country, two systems,' 'Hong Kong people administering Hong Kong,' and 'a high degree of autonomy' and keep the previous socioeconomic system and way of life of Hong Kong unchanged and its laws basically unchanged.

After the return of Hong Kong, the central … government shall be responsible for the foreign affairs relating to Hong Kong and the defense of Hong Kong. The Hong Kong Special Administrative Region shall be vested, in accordance with the Basic Law, with executive power, legislative power, and independent judicial power, including that of final adjudication. The Hong Kong residents shall enjoy various rights and freedoms according to law. The Hong Kong Special Administrative Region shall gradually develop a democratic system that suits Hong Kong's reality.

After the return, Hong Kong will retain its status of a free port, continue to function as an international financial, trade, and shipping center, and maintain its economic and cultural ties with other countries, regions, and relevant international organizations. The legitimate economic interests of all countries and regions in Hong Kong will be protected by law.

I hope that all the countries and regions that have investment and trade interests here will continue to work for the prosperity and stability of Hong Kong.

Hong Kong compatriots have a glorious patriotic tradition. Hong Kong's prosperity today, in the final analysis, has been built by Hong Kong compatriots. It is also inseparable from the development and support of the mainland. I am confident that with the strong backing of the entire Chinese people, the government of the Hong Kong Special Administrative Region and Hong Kong compatriots will be able to manage Hong Kong well, build it up, and maintain its long-term prosperity and stability, thereby ensuring Hong Kong a splendid future.

Summary

The first permanent settlement in what is today Hong Kong probably occurred about 2,000 years ago during the Han dynasty (206 BC-AD 220). The British, became interested in Hong Kong in the early 19th century. The trade of opium, a highly profitable product for British merchants and eventually an illegal import into China, led to the Opium Wars and Britain’s acquisition of Hong Kong. One year later, China and Britain signed the Treaty of Nanjing (Nanking) which ceded Hong Kong Island and adjacent small islands in perpetuity to Britain. Treaty disputes and other incidents led to the Second Opium War in 1856, also won by Britain. The conflict ended with the ratification of the Treaty of Tianjin in 1860. In 1898 China leased the New Territories to Britain for 99 years, adding more than 900 sq km (350 sq mi) of land and considerable territorial waters to Hong Kong.

The New Territories was leased by China to the United Kingdom in 1898; it was returned to China on July 1, 1997, along with the rest of Hong Kong. The British acquisition of the New Territories in 1898 set the stage for Hong Kong’s rapid growth during the 20th century. Farmers lived in the area that is now the New Territories before Britain leased the region from China in 1898 to create a buffer zone between Victoria Harbor and China proper. Britain sought the land less out of fear of China, than from concern over the rapid expansion of other colonial powers—Germany, France, Japan, and Russia—in China.

Hong Kong grew slowly during the 19th century, although gaining the New Territories added a substantial rural population. By 1900 there were perhaps as many as 100,000 people. This wave of population growth was halted during World War II (1939-1945) when Japanese forces invaded and occupied Hong Kong for almost four years. Hong Kong’s greatest growth and development occurred after the Communist takeover of China in 1949, when the commercial and shipping functions of Guangzhou and Shanghai shifted to Hong Kong.

Hong Kong served as China’s window to the world during the Chinese administration of Mao Zedong. After Mao’s death in 1976, Hong Kong’s role as a banker to China, and as its supplier of information, technology, and capital, intensified. The British territory was to become, in other words, Chinese. The bastion of capitalism was to fall, under the authority of Communists. Six million people, whether they liked it or not, were to watch their nationalities and their citizenships and their futures change in the blink of an eye.

In 1990, the literacy rate in Hong Kong was virtually 100 percent; in China, some 182 million people out of an estimated population of about 1.2 billion could not read or write.

A challenge for Hong Kong and China—two societies that have evolved over the last 150 years into entities that are dramatically different from each other—to unite and create a blend of the two ways of life.

The first tea imported into Britain came from China via the Portuguese, who had a trading post in their colony of Macao on the southeastern coast of China. Before the demand was so huge, it was decided that Britain should import the tea itself, rather than let the Portuguese act as the middlemen.

Hong Kong is no longer considered an important strategic outpost of the Empire. In case of a world war in which Britain and Japan were involved, it was agreed that the imperial defense line would be withdrawn to Singapore, and Hong Kong's military importance would be limited to delaying action against an enemy advance. The life of this small but important British colony was dominated during 1940 by two wars — one in Europe and one in Asia.

The Japanese seemed to be everywhere at once. Before the end of December, 1940, they took British Hong Kong and the Gilbert Islands (now Kiribati) and Guam and Wake Island (U.S. possessions), and they had invaded British Burma, Malaya, Borneo, and the American-held Philippines. British Singapore, long regarded as one of the world’s strongest fortresses, fell to them in February 1942, and in March they occupied the Netherlands East Indies and landed on New Guinea. In January 1942, Thailand declared war against Britain and the United States.

Scientists succeeded in reconstructing the 1918 influenza virus in 2005 after finding samples of the virus in the preserved tissues of three people killed by the Spanish flu.

Hong Kong’s climate is subtropical and monsoonal. The average daily temperature range is 26° to 31°C (78° to 87°F) in July and 13° to 17°C (55° to 63ºF) in February. Rainfall averages 2,159 mm (85 in) a year. According to the 1991 census, Hong Kong had a population of 5,674,114. The 2006 population was 6,940,432, indicating a population density of 7,018 persons per sq km (18,176 per sq mi). About 98 percent of the people are ethnic Han Chinese and 90 percent speak the Cantonese dialect of Chinese .

From 1984 to 1997, due to the uncertainty of the transition back to China, thousands of well-educated and wealthy Hong Kong citizens moved to countries such as Australia, Canada, and the United States, where they obtained permanent residency status or citizenship. Education is free and compulsory for all children from the age of 6 to 15, and adult literacy is over 90 percent. There are seven colleges and universities, including two polytechnic schools.

A large banquet is the highlight of the elaborate wedding celebration. The banquet is often held after an afternoon of "mah-jongg", a tile game that is a cross between dominoes and cards. Chinese family members are bound by a strong tradition of loyalty, obedience, and respect. Hong Kong has one of the lowest divorce rates in the world. Chinese do not usually display affection in public. A handshake is a fairly usual form of greeting. For all festivities including weddings, the gifts are given money in a red envelope. The color red and loud noise are two hallmarks of the holidays celebrations.

The Hong Kong people have one of the highest standards of living in all of Asia, and it is more than 30 times higher than China’s average standard of living.

Hong Kong as a primary link to the world economy and has a favorable atmosphere for business and trade. Hong Kong’s fishing fleet is significant and contributes about two-thirds of the live and fresh marine fish consumed each year. Hong Kong is among the leading trading centers in the world, and shipping and trade continue to be important aspects of its economy. Tourism is one of Hong Kong’s most important service activities and it is the third largest source of foreign exchange earnings.

Hong Kong was a British dependency from the 1840s until July 1, 1997, when it passed to Chinese sovereignty as the Hong Kong Special Administrative Region (SAR). In 1984 Britain and China signed the Sino-British Joint Declaration, which stipulated that Hong Kong return to Chinese rule in 1997 as the Hong Kong Special Administrative Region (SAR) of China. The Joint Declaration and a Chinese law called the Basic Law, which followed in 1990, provide for the SAR to operate with a high degree of economic autonomy for 50 years beyond 1997.

The judiciary of the Hong Kong SAR is independent, and laws are based on English common law and the rules of equity. Judges are appointed by the chief executive.