Hong Kong*


Currency unit

HK dollar



Far East








Hong Kong is a product of western attempts to trade with China.

It was a British colony until it was returned to China in July 1997 according to an agreement signed in 1984.

In British times there were two parts: Hong Kong Island was ceded by China to Britain in 1842 by the Treaty of Nanking following the first Opium War (1839-1842). In theory this area was to be British in perpetuity; the New Territories were leased for 99 years from China by Britain in 1898. It is these territories which were due to be returned to China in 1997. However, Hong Kong island was also returned, as even if the Chinese could be persuaded to observe the legal terms of the treaty, it would not have been viable without the New Territories and they have not recognized the original treaties which set up Hong Kong. (These are universally regarded in China as a national humiliation).

Japan occupied it from 1941-1945.

During the early years of Communism in China many people fled to HK to escape the economic system. It was their enterprise that changed the colony from being a rural backwater to an important economic power, first by setting up factories, then by creating a financial center. The British role was largely to provide a legal framework.

The people of Hong Kong are afraid that the methods of government practiced in China and Tibet will be used on them and some tried to emigrate to other countries before it happens. Many moved to Canada (British Columbia).

Hong Kong is a prosperous economy said to be based on pure unregulated capitalism. Even though the same system is now being operated in the territories around it (Special Economic Zones) there were fears that HK would cease to be prosperous after being taken over by China, especially if the fairness of the courts can no longer be trusted. Moreover, Shanghai is growing very fast and may replace HK as a financial center.









For almost the whole period of Britain's rule in Hong Kong there were no elected institutions. Now there are some elected members of the Legislative Council but a majority of government appointed members. The voters are a small proportion of the population. There are local governments with elected members.

Many Hong Kong people want to see democracy in place before the handover to China. All the signs are that the British government had made a secret agreement with the Beijing regime not to introduce any more democracy.

Hong Kong people demonstrated in the street after the Tienanmen Square massacres of June 1989.

China already had a large say in government policy in Hong Kong through its diplomatic representative (the New China News Agency) and the joint committees with the British on preparing for the handover.

In October 1992 the British governor announced a policy of increasing the number of voters for the 1995 election, against the advice of the Foreign Office "experts" . The main effect of this announcement was to annoy the rulers of China who had no wish to increase democracy in Hong Kong in case this too spreads into China. The signs are that China will resist, and spokesmen have declared that China would annul all laws on Democracy on handover.

Talks between Britain and China about managing the handover were stalled by the Chinese who showed every sign that they intended to come to no agreement but spin them out until 1997. They threatened to ignore any agreement, including the existing one, and prepared a government to rule the area. They said they would dissolve the assembly and install a government similar to that in the rest of China - if the Chinese regime itself survives until then. Almost the only hope for democracy in HK was that after the death of Deng Xiao Peng China itself would democratize, or fall apart. However, if the latter there might be civil war which would be bad for business.

March and September 1995 elections showed more support for the Democrats (anti-Communists) than for the pro-Chinese parties.

In December 1996 China appointed a governor (Chief Executive) and then chose an assembly of notables who selected a legislature. The signs are that these will be completely subservient to China and will also be very corrupt.

Elections after the handover were to a restricted franchise, which seems unlikely to be enlarged. In 2007 the Chief Executive has again promised Democracy but there is no sign that the franchise will be extended - or that the majority of the people want it.

Interesting reading

John Keay - History of the Honourable East India Company






An almost completely unregulated market economy with few social services other than subsidized housing and health.

The economy has had a high rate of growth and become one of the world's successful economies. Almost all the people are refugees from China.

The big question is whether this economy will continue after July 1997. If Communist policies are applied to it, many of the educated people and entrepreneurs will try to leave.

Most people hoped that the old men running China would die before then and be replaced by modernizers. One possibility was that Hong Kong methods would spread into China. The areas next to Hong Kong have been declared by the Chinese to be the Shenzen Special Economic Zone where Hong Kong industrialists are investing to make use of the cheaper labor of China. This suggests that Hong Kong might even take over China.

However, the Chinese capitalist economy is already growing so fast that HK may become a fairly small part of it. Its importance might be as a source of modern financial services: Stock Exchange and links to the world financial markets.

The greatest danger is probably that corruption will grow and thus the efficiency of the economy will decline.

In 2007 it is clear that HK has flourished since the handover. Manufacturing has migrated to the nearby Special Economic Zone where there are few labor laws and lower wages.






A very polluted area.





Human Rights

Rights of non Chinese residents (mainly descendants of Indians) were thought doubtful after China takes over.

Vietnamese attempted immigrants were held in closed prisons in bad conditions. It was believed they too would not be welcome when China takes over. Many have been sent back to Vietnam by force.

After handover?

British courts were thought likely to be abolished after handover. China intended to cancel Bill of Rights and reinstate colonial preventive detention laws.

Climate effects

Last revised 13/04/10

East Asia


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