Hong Kong

Hong Kong is one of two special administrative regions of the People's Republic of China. It is located on the eastern side of the Pearl River Delta. The territory includes Hong Kong Island, Lantau Island, the Kow-loon Peninsula, and the New Territories. Its total area is 1,104 sq. km. The population was recorded as 6.99 million in 2006. Over 90 percent of the population are Chinese. The second half of the 20th century saw dramatic growth in Hong Kong's population, beginning with an influx of refugees from the mainland following the communist victory and the founding of the People's Republic of China (PRC). Thus, most Hong Kong residents are first- or second-generation immigrants. Hong Kong is one of the world's leading financial centers and was said to be the most economically free in the world from 1995 to 2008 according to the Heritage Foundation's Index of Economic Freedom.

Hong Kong was a small fishing community early in the 19th century. Its development began when it became a British colony following the signing of the Treaty of Nanking on August 29, 1842, when Hong Kong Island was ceded to Britain “in perpetuity.” In 1860, after China's defeat in the second Opium War, Britain claimed the areas south of Boundary Street on the Kowloon Peninsula and Stonecutter's Island. These were ceded to Britain under the Convention of Peking. On June 9, 1898, the New Territories, including part of Kowloon and over 200 islands, were leased to Britain for 99 years. Hong Kong's administration followed the pattern for a British colony, with a governor nominated by Whitehall. In the late 19th century, Hong Kong was a major trading port of the British Empire in Asia. The Hong Kong and China Gas Company developed in 1861, the Peak Tram in 1885, and the Hong Kong Electric Company in 1889; China Light and Power followed in 1903, the electric tramways in 1904, and the Kowloon-Canton Railway in 1910.

Hong Kong's population suffered under Japanese occupation during World War II, but recovered quickly as mainland immigrants, fearing communist reprisals, sought refuge in the colony following the capitulation of the Nationalist forces and the establishment of the PRC in 1949. Many companies in Shanghai and Guangzhou shifted their operations to Hong Kong. Thus, the textile and other manufacturing industries grew and Hong Kong's population dramatically increased in the 1950s as people flocked to Hong Kong for jobs and security. Thousands of immigrants lived in squatter areas all over the colony, the most infamous of which became Shek Kip Mei. The Christmas Day fire of 1953 left 53,000 people homeless and galvanized the British rulers into developing Hong Kong's first public housing program. From its very humble beginnings, this program has developed to include general public housing (rent only) and home ownership schemes covering a wide range of salaries and needs in a territory where home purchase is out of financial reach of the majority.

During the 1960s, the textile industry made up about half of Hong Kong's domestic exports in value. From the 1960s to the 1980s, the manufacturing sector gradually moved from simple labor-intensive products to high-value added products. At that time, secondary production included manufacturing and construction, which made a significant contribution to the gross domestic product (GDP), while primary production became insignificant. The open door policy and economic reforms adopted by China in the 1980s provided (and continue to provide) Hong Kong's industrialists with cheaper labor and land. Using the cheaper supply of land and labor in the Pearl River Delta, industrialists gradually expanded their production bases across the border into mainland China while retaining their offices in Hong Kong. This operation mode enables the continuous economic development in Hong Kong.

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