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HISTORY |
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While the Chinese may argue, with justification, that Hong Kong is
Chinese territory, the development of the city only began with the
arrival of the British in Guangzhou in the eighteenth century.
The Portuguese had already been based at Macau, on the other side of the
Pearl River Delta, since the mid-sixteenth century, and as Britain's sea
power grew, so its merchants, too, began casting envious eyes over the
Portuguese trade in tea and silk. The initial difficulty was to persuade
the Chinese authorities that there was any reason to want to deal with
them, though a few traders did manage to get permission to set up their
warehouses in Guangzhou - a remote southern outpost, from the
perspective of Beijing - and slowly trade began to grow. In 1757 a local
Guangzhou merchants' guild called the Co Hong won the exclusive rights
to sell Chinese products to foreign traders, who were now permitted to
live in Guangzhou for about six months each year.
In the meantime, it had not escaped the attention of the foreigners that
the trade was one-way only, and they soon began thinking up possible
products the Chinese might want to buy in exchange. It did not take long
to find one - opium from India. In 1773 the first British shipload of
opium arrived and an explosion of demand for the drug quickly followed,
despite an edict from Beijing banning the trade in 1796. Co Hong, which
received commission on everything bought or sold, had no qualms about
distributing opium to its fellow citizens and before long the balance of
trade had been reversed very much in favour of the British.
The scene for the famous Opium Wars was now set. Alarmed at the outflow
of silver and at the rising incidence of drug addiction among his
population, the emperor appointed Lin Zexu as Commissioner of Guangzhou
to destroy the opium trade. Lin, later hailed by the Chinese Communists
as a patriot and hero, forced the British in Guangzhou to surrender
their opium, before ceremonially burning it. Such an affront to British
dignity could not be tolerated, however, and in 1840 a naval
expeditionary force was dispatched from London to sort the matter out
once and for all. After a year of gunboat diplomacy - blockading ports
and seizing assets up and down the Chinese coast - the expeditionary
force finally achieved one of their main objectives, through the Treaty
of Nanking (1842), namely the ceding to Britain "in perpetuity" of a
small offshore island. The island was called Hong Kong. This was
followed eighteen years later, after more blockades and a forced march
on Peking, by the Treaty of Peking , which granted Britain the Kowloon
peninsula, too. Finally, in 1898, as the Qing dynasty was entering its
terminal phase, Britain secured a 99-year lease on an additional one
thousand square kilometres of land to the north of Kowloon, which would
be known as the New Territories.
The twentieth century has seen Hong Kong grow from a seedy merchants'
colony to a huge international city, but progress has not always been
smooth. The drug trade was voluntarily dropped in 1907 as the Hong Kong
merchants began to make the transfer from pure trade to manufacturing.
Up until World War II, Hong Kong prospered as the growing threat of both
civil war and Japanese aggression in mainland China increasingly began
to drive money south into the apparently safe confines of the British
colony. This confidence appeared glaringly misplaced in 1941 when
Japanese forces seized Hong Kong along with the rest of eastern China,
though after the Japanese defeat in 1945, Hong Kong once again began
attracting money from the mainland, which was in the process of falling
to the Communists. Many of Hong Kong's biggest tycoons today are people
who escaped from mainland China, particularly from Shanghai, in 1949.
Since the beginning of the Communist era , Hong Kong has led a
precarious existence, quietly making money while taking care not to
antagonize Beijing. Had China wished to do so, it could have rendered
the existence of Hong Kong unviable at any moment, by a naval blockade,
by cutting off water supplies, by a military invasion - or by simply
opening its border and inviting the Chinese masses to stream across in
search of wealth. That it has never wholeheartedly pursued any of these
options, even at the height of the Cultural Revolution, is an indication
of the huge financial benefits that Hong Kong brings to mainland China
in the form of its international trade links, direct investment and
technology transfers.
In the last twenty years of British rule, the spectre of 1997 loomed
large in people's minds. In 1982 negotiations on the future of the
colony began, although during the entire process that led to the
Sino-British Joint Declaration nerves were kept on edge by the public
posturings of both sides. The eventual deal, signed in 1984, paved the
way for Britain to hand back sovereignty of the territory (something the
Chinese would argue they never lost) in return for Hong Kong maintaining
its capitalist system for at least fifty years.
Almost immediately the deal sparked controversy. It was pointed out that
the lack of democratic institutions in Hong Kong - which had suited the
British - would in future mean the Chinese could do what they liked.
Fears grew that repression and the erosion of freedoms such as travel
and speech would follow the handover. The Basic Law , which was
published by the government in 1988, in theory answered some of those
fears. It served as the constitutional framework, setting out how the
One Country/Two Systems policy would work in practice. But it failed to
restore confidence in Hong Kong, and a brain-drain of educated,
professional people leaving for other countries began to gather pace.
The 1989 crackdown in Tian'anmen Square seemed to confirm the Hong Kong
population's worst fears. In the biggest demonstration seen in Hong Kong
in modern times, a million people took to the streets to protest what
had happened. Business confidence was equally shaken, as the Hang Seng
index, the performance indicator of the Stock Exchange, dropped 22
percent in a single day.
The 1990s were a roller-coaster ride of domestic policy dramas: the
arrival of tens of thousands of Vietnamese boat people (ironically,
refugees from communism), the rise of the democracy movement and
arguments about whether Britain would give passports to the local
population . When Chris Patten arrived in 1992 to become the last
Governor, he walked into a delicate and highly charged political
situation. By means of a series of reforms, Patten quickly made it clear
that he had not come to Hong Kong simply as a make-weight: first, much
of the colonial paraphernalia was abandoned, and then - much to the fury
of Beijing - he broadened the voting franchise for the 1995 Legislative
Council elections (Legco) from around 200,000 to around 2.7 million
people. Even though these and other changes he introduced guaranteed
that the run-up to the 1997 handover would be a bumpy ride, they won the
governor significant popularity among ordinary Hong Kong people,
although the tycoons and business community had far more mixed feelings.
After the build-up, the handover itself was something of an anticlimax.
The British sailed away on HMS Britannia, Beijing carried out its threat
to disband the elected Legco and reduce the enfranchised population, and
Tung Che Hwa, a shipping billionaire, became the first Chief Executive
of the Hong Kong Special Administrative Region (SAR). But if local
people had thought that they would be able to get on with "business as
usual" post-handover, they were wrong. Within days the Asian Financial
Crisis had begun, and within months Hong Kong was once again in the eye
of a storm. While the administration beat off attempts to force a
devaluation of its currency, the stock and property markets suffered
dramatic falls, tourism collapsed, unemployment rose to its highest
levels for fifteen years, and the economy officially went into
recession. While the administration characterized these as temporary
setbacks - part of a global economic downturn - there was undoubted
dismay amongst official circles in both Hong Kong and Beijing at the
increasing - and unprecedented - level of criticism of officials and
their policies in newspapers, on radio phone-in's and among ordinary
people - not to mention the enduring and not unrelated popularity of the
democratic parties.
Post-1997
Just as Hong Kong citizens have retained their right to visa-free travel
to most countries of the world, so most foreigners have continued to be
allowed to enter Hong Kong without prior permission for up to three
months. This includes nationals of Britain, the USA, Australia and New
Zealand. For detailed information, contact your local HKTA office.
Hong Kong has retained its own separate currency, the Hong Kong dollar ,
which is pegged at around $7.40 to the US dollar. Coincidentally, one
Hong Kong dollar is almost exactly equal to one Chinese yuan, though
yuan and Hong Kong dollars cannot be used interchangeably in either
territory. In this chapter, the symbol $ refers to Hong Kong dollars
throughout unless stated.
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