Hong Kong was part of the Chinese empire before coming under British administration as a direct result of the 19th-century Opium Wars. The conflict arose from Chinese resistance to allowing their ports to trade in opium produced in British-controlled India. The British used force on two occasions in the late 1830s and late 1850s to impose their commercial will. When peace terms were drawn up in 1841 in the Treaty of Nanking, which ended the First Opium War, the Emperor of China agreed that Hong Kong Island should be ceded to Britain and five other ports licensed for foreign trade. The territory
of Hong Kong comprises two other pieces of land: the Kowloon peninsula was ceded under the Convention of Peking in 1860, and in 1898 the New Territories were leased from China for 99 years. The British controlled Hong Kong from then – apart from a four-year period during World War II when the territory was occupied by the Japanese – until the territory was handed back to the Chinese in July 1997.
The terms under which the reversion took place were settled at an agreement signed by the British and Chinese Governments in December 1984. As well as confirming the terms of previous agreements, the 1984 agreement contained guarantees on the future of Hong Kong, specifically that the territory would enjoy a high degree of autonomy, especially in the economic field, where its existing system would be largely left intact. The slogan ‘one country, two systems’ was coined by the Chinese to describe the future regime and its relationship with mainland China. Only in the fields of foreign affairs and defense would the new Special Administrative Region of Hong Kong be subject to the diktat of Peking.
The main point of contention in the period leading up to handover was political representation. Under the colonial regime, democratic representation had been kept to a minimum and executive powers were firmly retained by the Governor. The system has survived, largely intact, since the departure of the British in July 1997.
Beijing selected the shipping tycoon Tung Chee Hwa to fill the new post of Chief Executive with powers comparable to those of the former Governor. A pro-Beijing political party created shortly before the handover, the Democratic Party for the Betterment of Hong Kong (DAB), took control of the LegCo after the first election held under Chinese rule in May 1998. The result has been more or less repeated in subsequent polls. The limited powers of the LegCo and the restricted nature of the electoral franchise mean that no serious opposition can be mounted to the policies of the administration. In June 2002, Tung Chee Hwa was confirmed in a second term of office as chief executive.
The timing for the new regime was unfortunate in as much as the Asian financial crisis hit the region just months after the territory had changed hands. Initially, it seemed that Hong Kong would come through largely unscathed: in fact, the economy has been depressed for most of the last five years (see Economy section). This has given rise to some political discontent and the self-confidence that previously characterized Hong Kong is now waning severely. Since 2003 there have been protests calling for a more democratic and representative sysyem of Government. On March 10 2005, Mr Tung Chee-Hwa announced he had resigned as Chief Executive for reasons of ill heath. In accordance with basic law, the Chief Secretary Donald Tsang, became Acting Chief Executive. He was appointed by the Central Peoples Government in Beijing for a two-year term on Jun 21 2005. China is pushing the administration to introduce an anti-subversion law, principally to combat the Falun Gong Christian religious sect.
Government
Hong Kong is now a Special Administrative Region of the People’s Republic of China (PRC). Under the Basic Law which is the governing instrument of the region, executive power is held by a Chief Executive, who is appointed by an ‘Election Committee’ composed of 800 ‘representatives of the community’. The Chief Executive is answerable to the State Council of the PRC (see China (People's Republic of) section) and serves a five-year term. The Chief Executive appoints a 15-member Executive Council to assist in the administration of the Region. Hong Kong’s legislature is the 60-member Legislative Council; 24 members are directly elected in geographical constituencies, 30 members are selected from ‘functional constituencies’ (mostly professional bodies and business interests) and the remaining six by the ‘Election Committee’.
EconomyHong Kong’s economy has moved away from manufacturing and is now service-based, acting as a major corporate and banking center as well as a conduit for China’s burgeoning exports. Manufacturing is concentrated in textiles, consumer electronics and other consumer goods (Hong Kong is the world’s largest producer of children’s toys). Hong Kong’s natural deep-water harbor is probably the best in the region. Much regional trade is still conducted through Hong Kong.
Soon after Hong Kong’s handover to China in July 1997, Asia’s financial crisis hit. With its mature and stable banking system, Hong Kong weathered the immediate storm. However, the depressed regional economy took its toll. After a brief recovery, by mid 2002 the economy was contracting at an annual rate of 1.5%. Unemployment, meanwhile, peaked at 8%. The economy is now rebounding, unemployment is falling and the property market has picked up. Tourism and trade are now the key drivers of growth.
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