Hong Kong has one of the most important import-export and finance economies in the Pacific region. It became a British colony in 1842 but was returned to the People’s Republic of China in 1997. It is now known as the “Hong Kong Special Administrative Region” in recognition of its economic importance, which the PRC has committed to respecting until 2047.

Hong Kong was part of China’s Guangdong Province until it became a British colony in 1842. In 1997 Hong Kong was returned to the People’s Republic of China (PRC) and is now known as the “Hong Kong Special Administrative Region.” During its colonial era Hong Kong became one of the most important import-export and finance economies in the Pacific region. Today it remains a vibrant, modern Chinese city with a diverse range of cultural influences and a thriving capitalist economy.


Located on the south coast of China near the mouth of the Pearl River, the area that is now known as “Hong Kong” comprises Hong Kong Island, Kowloon Peninsula, and the New Territories. Until the 1840s this area was part of Xinan County in Guangdong Province of the Qing dynasty (1644–1912). The region was populated mostly by Han Chinese and Hakka (a Chinese minority people), and the local economy was dominated by pearl fishing, salt making, incense tree cultivation, and piracy and smuggling.

The British, seeking a new location from which to maintain their lucrative opium trade with China, occupied Hong Kong Island in 1841. They were granted formal control of the island by China in 1842 through the Treaty of Nanjing, which ended the First Opium War (1839–1942), and the island became a colony on 26 June 1843. The Second Opium War (1856–1860, also known as the Arrow War) resulted in Britain’s acquisition of Kowloon Peninsula, located across the bay from Hong Kong Island, and in 1898 Britain acquired a ninety-nine-year lease on the New Territories. Britain maintained control of Hong Kong until 1997, except from 1941 to 1945, when the Japanese controlled the territory. The impending end of the lease on the New Territories led to a 1984 agreement between the British and Chinese governments for Hong Kong’s return to China as an autonomous region.

Political System

Under the British the governor, who was appointed, had executive power and was assisted by the Legislative Council, of which a small percentage was elected. This system, which was made somewhat more democratic under the leadership of Governor Chris Patten in the 1990s, has remained essentially intact in the post-1997 era. In March 1990 the PRC’s National People’s Congress approved a “Basic Law,” based largely on English law, which constitutes the basis for Hong Kong’s current legal system. Under this system Hong Kong has an appointed chief executive who serves for five years, an appointed cabinet, and a legislature that is selected by both direct and indirect elections.

As a condition for the 1997 handover, China agreed to maintain a “one country, two systems” approach to governing Hong Kong for fifty years. Under this system Hong Kong is to have a high degree of political and economic autonomy from China. Its foreign and military affairs, however, have been taken over by the PRC government. In addition, Hong Kong’s chief executive is appointed by the PRC.


Hong Kong has a tropical monsoon climate. It has an area of 1,097 square kilometers with 733 kilometers of coastline and a large deep-water harbor. The territory consists of a peninsula and more than two hundred small islands and is mostly mountainous with a small percentage of arable land. The hilly terrain provides relatively little living space, and so both Hong Kong Island and Kowloon have been enlarged through land reclamation. Architecturally, Hong Kong is composed almost entirely of large office and apartment blocks. Hong Kong is connected to the rest of China by waterways, such as the Pearl River, as well as railroads and roads.


The density of Hong Kong is 6,352 people per square kilometer, making Hong Kong one of the world’s most densely populated areas. Ninety-five percent of the population is ethnically Chinese, with Filipinos, Indonesians, British, and Indians constituting the largest other ethnic groups.


Prior to its colonization by the British, Hong Kong had long been the site of both legal and illegal trade with neighboring Asian nations, Arabs, and some Westerners. Under the British the colony replaced Guangzhou (Canton) as the principal locus of Anglo-Chinese trade in southern China, much of which, in the nineteenth and early twentieth centuries, was based on opium. This trade was controlled by a few large trading houses, known as hong. After the establishment of the PRC in 1949 Hong Kong experienced a huge influx of refugee industrialists, mostly from the Chinese industrial city of Shanghai. These industrialists, using refugee labor that continued to flow into Hong Kong through the second half of the twentieth century, turned Hong Kong into a center of manufacturing and finance. Hong Kong has limited natural resources, however, and must import most of its food and raw materials. As China increasingly opened up for trade in the 1980s and 1990s, Hong Kong’s economy again became more oriented toward China.


Hong Kong’s culture has been influenced by its mostly Chinese population as well as its British colonial past. Its official languages are Cantonese and English. Its population has always been mostly Chinese, and this fact is reflected in the cuisine, popular culture, and many aspects of the landscape. The British elite who dominated colonial Hong Kong were mostly merchants, civil servants, and missionaries. As the post-1949 Shanghai industrialists established themselves financially; however, Hong Kong’s elite culture became increasingly Chinese.

Hong Kong’s colonial past led it to develop differently from the rest of China, especially during the period after 1949. Unlike the rest of China, Hong Kong has a thriving, free market, capitalist economy, and the very identity of Hong Kong is rooted in that successful economy. Although the PRC has committed itself to protect Hong Kong’s economic and political autonomy until 2047 (fifty years after the handover), what exactly will be the impact of Hong Kong’s reintegration into China remains to be seen. Will Hong Kong remain distinct from China, or will it become just another Chinese city?

Further Reading

Central Intelligence Agency. (2002). The world factbook: Hong Kong. Retrieved September 20, 2008, from https://www.cia.gov/library/publications/the-world-factbook/geos/hk.html

Cohen, W. I., & Li Zhao. (Eds.). (1997). Hong Kong under Chinese rule: The economic and political implications of reversion. Cambridge, U.K.: Cambridge University Press.

Lau Chi Kuen. (1997). Hong Kong’s colonial legacy. Hong Kong: Chinese University Press.

Morris, J. (1997). Hong Kong: Epilogue to an empire. London: Penguin Books.

Welsh, F. (1997). A history of Hong Kong. London: Harper Collins.

Source: Greene, J. Megan. (2009). Hong Kong. In Lins
un Cheng, et al. (Eds.), Berkshire Encyclopedia of China, pp. 1046–1048. Great Barrington, MA: Berkshire Publishing.

High-rise apartments buildings and offices on Hong Kong Island overlook the harbor and Kowloon. PHOTO BY JOAN LEBOLD COHEN.

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