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Hong Kong Information > Orientation

A Brief History of Hong Kong

View from the Peak, circa 1880s 

Star Ferry, circa 1900s 

Early Settlement

The earliest known settlement in Hong Kong is thought to be Neolithic, as evidenced by findings of pottery shards, stone implements, and bronze articles uncovered at excavations around the territory. The earliest modern peoples are said to have migrated from North China and settled in Hong Kong some time during the 2nd millennium BC; later settlement consisted, for the most part, of groups from South China: Cantonese, Hakka, and Hoklo.

Prior to the arrival of the British, Hong Kong was a small fishing community and a haven for travelers and pirates in the South China Sea. During the Opium Wars of the 19th Century, Britain used the territory as a naval base.

Following the end of the first Opium War, the Treaty of Nanking, signed in 1842, ceded Hong Kong to Britain in perpetuity, with Sir Henry Pottinger taking the reigns as the colony's first governor. Further conflicts between Britain and China resulted in the British Empire’s acquisition of Kowloon and Stonecutters Island in 1860. In 1898 Britain signed an agreement to rent the New Territories for 99 years.

The War Years
In the 1900s, Hong Kong served as an interim depot for those migrating from China to the United States or Europe. It also served as an asylum from the political uncertainties, unrest and Japanese encroachment that China experienced during the 1930s and 40s.

It is estimated that some 100,000 refugees entered Hong Kong in 1937, 500,000 in 1938 and 150,000 in 1939 - inflating Hong Kong's population at the outbreak of World War II to an estimated 1.6 million. At the height of this influx, roughly 500,000 people were thought to be sleeping in the streets.

By the end of 1948, it was becoming increasingly apparent that Mao’s Communists were positioning to seize power. Concerns among the Chinese population were fuelled and, as a result, Hong Kong experienced an influx of political refugees unparalleled in its history.

Hundreds of thousands of people, mainly from Guangdong province, Shanghai and other commercial centers, flooded into the territory during 1949 and the spring of 1950, swelling the population to an estimated 2.2 million. The population today stands at just over seven million.


Central Praya, circa 1900s

Central, circa 1900s

The Beginnings of a Modern Economy
This sudden deluge of refugees provided Hong Kong with a constant flow of cheap labour, capital and new technology. A proportion of the refugees were wealthy textile manufacturers who invested and set up factories in Hong Kong, creating a booming industrial sector.

Further incentives to make Hong Kong home included the tax policies, the relative political calm and the rule of law, all attractive features to those fleeing the turbulent and potentially dangerous situation on the Mainland.

Meanwhile, Hong Kong's tax policies began to attract increased foreign investment, further stimulating the territory’s rapid growth. The 1950’s saw Hong Kong begin in earnest a new career as a manufacturing and industrial centre. Textiles, electronics, plastics and many other low-priced goods stamped "Made in Hong Kong" flowed from the Territory in ever-increasing amounts to markets worldwide.

With the continuing unrest in China ensuring a steady flow of refugees into the region, Hong Kong was guaranteed a perpetually cheap pool of labour with which to further expand production. Meanwhile, the government began a number of civic programmes to better the lives of these immigrants, including massive public housing projects. Slowly but surely the standard of living rose, whilst Hong Kong began to prosper.

The Hand Over Issue
The 1980’s bore witness to a rather tense period between Hong Kong and Britain, with the latter raising the issue of the expiration of the New Territories lease. In 1984, the Joint Declaration signed by Britain and China stipulated that the sovereignty of Hong Kong would be resumed by China in 1997.

The Joint Declaration affirmed that, for 50 years from 1997, Hong Kong's lifestyle would remain unchanged and that the territory would enjoy a high degree of autonomy, except in foreign and defence affairs, and China's socialist system and policies would not be practised in the SAR.

Despite these assurances, the thought of future rule by China caused great consternation amongst the population of Hong Kong. For the first time in its history, the colony experienced a skilled labour shortage, the Brain Drain, as anybody who had the inclination and opportunity to leave, did so.

Despite this, Hong Kong was a veritable economic wonder in the 80s and 90s; manufacturing gave way to financial services and Hong Kong became the "Gateway to China".

Hong Kong After 1997

On July 1, 1997, Hong Kong became the Special Administrative Region (SAR) of the People's Republic of China. Since then, little has changed with the exception of the economic climate. After the boom years running up to the hand over, the Asian Crisis cooled things off considerably in Hong Kong with the government being forced to step in at one point and prop up the stock market with a massive buying spree.

Property prices came off their 1996/97 high, by about 40-60% in 2000 -2001. The climate in 2002 was slightly more optimistic.

In 2004, property rental prices continue to fall in the luxury market. Premium commercial property rentals, however, have dropped 20% and are likely to fall further in the near future with the addition of new commercial space coming online.

Hong Kong is also seeing a good deal more competition from such rival cities as Singapore and Shanghai. It has been said that Hong Kong could be overtaken in the near future by one of these cities, but the fact remains that there is enough room for several major economic centres in South East Asia, so this is unlikely. Though Hong Kong’s persona may change, it is Hong Kong’s flexibility, a characteristic that has been well demonstrated throughout the city’s history that will lend the city its strength and resilience.

Indeed, Hong Kong remains one of the most exciting, energetic and dynamic cities in the world. Anything is possible here and probably one of the few places in the world where it is still, truly possible to work one’s way from rags to riches, as many a resident tycoon will testify. Hong Kong's history is rich and colourful and its future will no doubt be equally so.



Last Updated: 4 March, 2004


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