History

Urban Hong Kong was created by the British and nurtured by them for over 150 years, but today it is a Chinese city that looks forward to the future as an integral part of the world’s fastest-growing economy. The area has been inhabited since Neolithic times, but the territory of Hong Kong wasn’t formally established until the Union Jack was hoisted at Possession Point in 1841. The British ruled the territory under a lease from China until 1997—apart from a bloody four-year interlude during the Second World War when Imperial Japanese forces were in occupation.

A wave of immigration from mainland China added 70,000 to Hong Kong’s population after Mao Zedong’s communist forces seized power. In 1967, while the Cultural Revolution raged across the border, Hong Kong quaked under the fear of invasion, but by the early ’70s the threat had receded.

After Mao’s death in 1976, Deng Xiaoping took up the reins and began the slow process of opening up the People’s Republic of China (PRC) to the outside world. Local and foreign investment fuelled an export boom in Hong Kong, cementing its position as the gateway to China and the first ‘Asian tiger’ economy. Deng also brought the British to the negotiating table in the early ’80s, securing their agreement to restore sovereignty of Hong Kong to China at midnight on 30th June 1997. The strings attached to the ‘Handover’, as the occasion came to be known, were codified in the Sino-British Joint Declaration on the Question of Hong Kong. It purported to guarantee the continuity of Hong Kong’s political, legal and economic status for 50 years under the Basic Law, promising that ‘one country, two systems’ would prevail.

Politics

A sound judiciary and respect for the rule of law, based on the British system, underpin Hong Kong’s business success. In contrast to some near neighbours, examples of official and individual corruption are rare. However, Hong Kong struggled to establish an identity after it became a Special Administrative Region (SAR) of the PRC following the 1997 Handover. The remote and luckless chief executive Tung Chee Hwa, seen as Beijing’s puppet, stood down early in 2005, citing health issues, and was replaced by former chief secretary Donald Tsang. The career of Tsang, easily recognisable by his ever-present bow tie, straddles pre- and post-Handover administrations, but it remains to be seen how he will perform. Increased democracy is not a priority for Hong Kong’s—or Beijing’s—administrators, despite vociferous popular demand. The only elected body, the Legislative Council, lacks power and authority.

Religion

Hong Kong has a multicultural population with Chinese, Muslims, Christians, Jews and Hindus living in harmony. There are three primary religions in Chinese culture: Buddhism, Confucianism and Taoism. However, most residents would admit to worshipping at the glittering altar of wealth. Great faith is placed in luck and superstition—fortune tellers make a killing—and feng shui influences even the largest architectural projects. Tolerance rules, unless you’re a member of the Falun Gong faithful. Christians make up 10% of the population: half Catholic and half Protestant.

Economy

Despite its lack of natural resources, Hong Kong’s considerable wealth was established in manufacturing and export. Over the past decade, it has transformed into a service-based economy. For much of the 20th century it existed uneasily yet profited enormously as a capitalist icon physically attached to the underbelly of a communist super-state. The tables have turned, and it now seems ironic that the current buoyancy enjoyed by the population is a direct result of booming trade and economic growth in the PRC. Hong Kong is frequently touted as one of the ‘freest’ economies in the world, and successive administrations have made a mission out of avoiding any intervention. A series of blows have been endured since the Handover: the Asian financial crisis, SARS and avian flu all had negative effects. But consumer confidence has now returned, prompted by an influx of tourists from the mainland after travel restrictions were relaxed.

Population

The population was last measured at 7.2 million, with a growth rate of
1.3%. Chinese make up 95% of that total. Both English and Cantonese (a regional variation of Chinese) are official languages. Literacy rates are high, at 92%, and although there is some concern locally about declining standards of English, most business meetings are conducted in that language.