Hong Kong 10 Years On

On July 1, 1997 Hong Kong was handed over to China after 156 years of British rule. In celebration of the tenth anniversary of the Hong Kong Special Administrative Region, Lauren Weirick reflects on Hong Kong's past and looks ahead to its future.

Barren Rock to British Colony

Before the 1800s Hong Kong was a "barren rock", a small island lightly populated by fisherman. Rickshaws travelled on the narrow, winding streets and Chinese junks traded on the waters. The present day high-density Hong Kong was unheard of. Both China and Britain paid little attention to this island in the South China Sea until its strategic location was recognised during the First Opium War, when China attempted to resist Britain's imports of opium and settle the imbalance of trade. The Chinese were no match for the British might, and at the end of the war the Treaty of Nanking was signed, ceding Hong Kong Island as a colony of the United Kingdom. The treaty opened the doors for what followed at the end of the Second Opium War, when the Peking Convention ceded Kowloon to British powers. In 1898, the last deal was made when Britain leased the New Territories and islands for 99 years. This treaty, valid until 1997, would become the impetus for the return of Hong Kong to China. Over the next two centuries, Hong Kong transformed from a tiny fishing community into a multi-sector society with tremendous growth and development. Invasions, wars, revolutions and refugee influxes challenged the region, but by the 1990s Hong Kong was a player on the world stage, noted for its retail markets and the superiority of its financial services. But Asia's World City was about to change hands.

Countdown to the Handover

In 1982, talks began between British Prime Minister Margaret Thatcher and the Chinese government about the future of Hong Kong, since the British lease on the New Territories expired in 1997. Deng Xiaoping, leader of the Chinese government, refused to renew the lease. In fact, he requested that Hong Kong, in its entirety, be returned to China. All involved parties entered into uncharted waters: How could two very different countries work together to change the leadership of one of the most successful and wealthy regions of Asia? The answer was the 1984 Sino-British Joint Declaration, an agreement that Hong Kong would be restored to China on 1 July 1997, but would enjoy a high degree of autonomy and unchanged social and economic systems for a period of fifty years. This concept of 'one country, two systems' became a familiar term to everyone. As the date of the handover approached, some pundits predicted the worst. Emigration reached new heights as uncertainty grew, thanks to articles like the infamous June 1995 piece "The Death of Hong Kong" in Fortune magazine. But when 1 July 1997 rolled around, the transition went smoothly. Hong Kong Governor Chris Patten delivered his final speech and Tung Chee-hwa took over as Chief Executive in front of Chinese and British officials, including Prince Charles, at the newly constructed convention centre. With fanfare and fireworks, one flag was lowered and a different one was raised at the stroke of midnight. British officials left the territory via Victoria Harbour, and as the rain poured down, residents realised there would be no immediate momentous change.

One Country, Two Systems

After the handover, Hong Kong had its share of obstacles, many of which were unrelated. The East Asian financial crisis struck, the stock market crashed, the tech bubble burst, followed by the bird flu scare, the SARS pandemic and the hollowing out of the manufacturing sector.

What, if anything, do you think has changed as a result of the handover?

"Lots of things have changed in the past ten years, but most significant I think is the uncertainty we all faced pre-Handover is now gone. For better or worse, we now have a pretty good idea how China is going to continue managing Hong Kong. The uncertainty pre-Handover was awful and it made planning anything very difficult.... for the business community and environment this is very significant."

How do you see Hong Kong 10 years from now?

"It's hard to say. Some naysayers said that Hong Kong would be second to Shanghai or Singapore, but I don't think it's true. Hong Kong has reinvented itself as a centre. For China, it is important for banking and shipping and it's where people filter through to China. But without that, Hong Kong is important on its own as a very international place, a world capital."

Looking Back

1842 At the end of the First Opium War, the Treat of Nanking, signed by China and Britain, cedes Hong Kong Island to Britain. 1860 In the Peking Convention (or Convention of Beijing) China cedes the area of Kowloon to Britain. 1898 After the Second Opium War, Britain wins a 99-year lease on the New Territories and the islands. 1937 The Sino-Japanese War erupts and many mainlanders seek refuge in Hong Kong. 1941 Japan occupies Hong Kong after British colonial officials surrender on "Black Christmas". 1945 - 6 Japan is defeated in the Second World War and Britain reestablishes its control in Hong Kong. 1960s Social unrest and radical politics hiccup from China's Cultural Revolution. At the same time, the standard of living improves and Hong Kong becomes a manufacturing centre. 1976 Mao Zedong, China's communist leader, dies and is replaced by the more moderate Deng Xiaoping, who refuses to renew the 99-year lease, requesting the return of Hong Kong to China. 1984 Britain and China sign the Sino-British Joint Declaration, stipulating that Hong Kong will return to Chinese rule in 1997. 1992 - 4 Chris Patten, Hong Kong's final British governor, seeks last minute democratic reforms that are not met well by China. A number of residents apply for citizenship elsewhere in the midst of uncertainty. Jul 1 1997 The official handover of Hong Kong from Britain to China takes place. Oct 1997 The Hong Kong stock market crashes and the East Asian Financial Crisis begins. 2005 Chief Executive Tung Chee-hwa resigns and is succeeded by Donald Tsang, who is re-elected in 2007.

Then and Now

Population 6,412,837 6,980,412 Working Professionals 520,723 747,744 Stock Market East Asian Financial Crisis HKEx 7th in world Cathay Pacific flights to China 0 400 per week IPOs US$10 billion US$43 billion Tourists Over 10.4 million Over 23.4 million Chief Executive Tung Chee-hwa Donald Tsang No of Hotel or Guest Rooms 33,425 53,564 No of Hotels 86 Over 120 Tallest Building Central Plaza (374 m) Two IFC (415 m)