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The Liuhe Pagoda of Hangzhou, built in 1165 during the Song Dynasty

Lakeside Buildings on the West Lake

Hangzhou was the capital of the Southern Song Dynasty from the early 12th century until the Mongol invasion of 1276, and was known as Lin’an (??). It served as the seat of the imperial government, a center of trade and entertainment, and the nexus of the main branches of the civil service. During that time, the city was a sort of gravitational center of Chinese civilization: what used to be considered “central China” in the north was taken by the Jin, an ethnic minority dynasty ruled by Jurchens.

Numerous philosophers, politicians, and men of literature, including some of the most celebrated poets in Chinese history such as Su Shi (??), Lu You (??), and Xin Qiji (???) came here to live and die. Hangzhou is also the birthplace and final resting place of the famed scientist Shen Kuo (1031-1095 AD), his tomb being located in the Yuhang district.

During the Southern Song Dynasty, commercial expansion, an influx of refugees from the conquered north, and the growth of the official and military establishments, led to a corresponding population increase and the city developed well outside its 9th century ramparts. According to the Encyclopædia Britannica, Hangzhou had a population of over 2 million at that time, while historian Jacques Gernet has estimated that the population of Hangzhou numbered well over one million by 1276. (Official Chinese census figures from the year 1270 listed some 186,330 families in residence and probably failed to count non-residents and soldiers.) It is believed that Hangzhou was the largest city in the world from 1180 to 1315 and from 1348 to 1358.

Because of the large population and densely-crowded (often multi-story) wooden buildings, Hangzhou was particularly vulnerable to fires. Major conflagrations destroyed large sections of the city in 1132, 1137, 1208, 1229, 1237, and 1275 while smaller fires occurred nearly every year. The 1237 fire alone was recorded to have destroyed 30,000 dwellings. To combat this threat, the government established an elaborate system for fighting fires, erected watchtowers, devised a system of lantern and flag signals to identify the source of the flames and direct the response, and charged more than 3,000 soldiers with the task of putting out fires.

The city of Hangzhou was besieged and captured by the advancing Mongol armies of Kublai Khan in 1276, three years before the final collapse of the empire.[3] The capital of the new Yuan Dynasty was established in the city of Khanbaliq (Beijing).

The Venetian Marco Polo visited Hangzhou in the late 13th century and referred to the city as “beyond dispute the finest and the noblest in the world.” He called the city Kinsay which simply means “capital” in Chinese (actually Polo used a Persianized version of the word). Although he exaggerated that the city was over one hundred miles in diameter and had 12,000 stone bridges, he still presented elegant prose about the country: “The number and wealth of the merchants, and the amount of goods that passed through their hands, was so enormous that no man could form a just estimate thereof.”

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Hong Kong from Victoria Peak

A panoramic view of northern Hong Kong Island between North Point in the east and Kennedy Town in the west

Hong Kong[4] (Chinese: ??), officially the Hong Kong Special Administrative Region [pronunciation], is one of the two special administrative regions of the People’s Republic of China (PRC), the other being Macau. The territory lies on the eastern side of the Pearl River Delta, bordering Guangdong province in the north and facing the South China Sea in the east, west and south. Beginning as a trading port in the 19th century, Hong Kong has developed into a leading financial centre.

Hong Kong was a crown colony of the United Kingdom from 1842 until the transfer of its sovereignty to the People’s Republic of China in 1997. The Sino-British Joint Declaration and the Basic Law of Hong Kong stipulate that Hong Kong operates with a high degree of autonomy until at least 2047, fifty years after the transfer. Under the policy of “one country, two systems”, the Central People’s Government is responsible for the territory’s defence and foreign affairs, while Hong Kong maintains its own legal system, police force, monetary system, customs policy, immigration policy, and delegates to international organisations and events.

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Hong Kong in the late nineteenth century was a major trading post of the British Empire

Japanese troops march along Queen’s Road following the British surrender in 1941

Human settlement in the location now known as Hong Kong dates back to the Paleolithic era. The region was first incorporated into Imperial China in the Qin Dynasty, and served as a trading post and naval base during the Tang Dynasty and the Song Dynasty. The area’s earliest recorded European visitor was Jorge Álvares, a Portuguese mariner who arrived in 1513.[5][6] Contact with the United Kingdom was established after the British East India Company founded a trading post in the nearby city of Canton.

In 1839, the refusal by Qing Dynasty authorities to import opium resulted in the First Opium War between China and Britain.[7] Hong Kong Island was first occupied by British forces in 1841, and then formally ceded from China under the Treaty of Nanjing at the end of the war. The British established a Crown Colony with the founding of Victoria City the following year. In 1860, after China’s defeat in the Second Opium War, the Kowloon Peninsula south of Boundary Street and Stonecutter’s Island were ceded to Britain in perpetuity under the Convention of Peking. In 1898, Britain obtained a 99-year lease of Lantau Island and the adjacent northern lands, which became known as the New Territories.

Hong Kong was declared a free port to serve as an entrepôt of the British Empire. The Kowloon-Canton Railway opened in 1910 with a southern terminus in Tsim Sha Tsui. An education system based on the British model was introduced. The local Chinese population had little contact with the European community of wealthy tai-pans settled near Victoria Peak.[7]

In conjunction with its military campaign in World War II, the Empire of Japan invaded Hong Kong on December 8, 1941. The Battle of Hong Kong ended with British and Canadian defenders surrendering control of the colony to Japan on December 25. During the Japanese occupation of Hong Kong, civilians suffered from widespread food shortages caused by imposed rations, and hyper-inflation due to forced exchange of currency for military notes. Hong Kong’s population declined from 1.6 million before the invasion to about 600,000 in 1945,[8] when the United Kingdom resumed control of the colony following Japan’s defeat in the war.

Hong Kong’s population recovered quickly after the war, as a wave of mainland migrants arrived for refuge from the ongoing Chinese Civil War. With the proclamation of the People’s Republic of China in 1949, more migrants fled to Hong Kong from the fear of persecution by the Communist Party of China.[7] Many corporations in Shanghai and Guangzhou also shifted their operations to Hong Kong.[7] The colony became the sole place of contact between mainland China and the Western world, as the communist government increasingly isolated the country from outside influence. Trade with the mainland was interrupted during the Korean War, when the United Nations ordered a trade embargo against the communist government.[9]

The textile and manufacturing industries grew with the help of population growth and low cost of labour. As Hong Kong rapidly industrialised, its economy became driven by exports to international markets. Living standards rose steadily with the industrial growth. The construction of Shek Kip Mei Estate in 1953 marked the beginning of the public housing estate program. Hong Kong was disrupted by chaos during the riots of 1967.[7] Pro-communist leftists, inspired by the Cultural Revolution in the mainland, turned a labour dispute into a violent uprising against the colonial government lasting until the end of the year.

Established in 1974, the Independent Commission Against Corruption dramatically reduced corruption in the government. When the People’s Republic of China initiated a set of economic reforms in 1978, Hong Kong became the main source of foreign investments to the mainland. A Special Economic Zone was established the following year in the Chinese city of Shenzhen, located immediately north of the mainland’s border with Hong Kong. The economy of Hong Kong gradually displaced textiles and manufacturing with services, as the financial and banking sectors became increasingly dominant. After the Vietnam War ended in 1975, the Hong Kong government spent 25 years dealing with the entry and repatriation of Vietnamese refugees.

With the lease of the New Territories due to expire within two decades, the governments of the United Kingdom and the People’s Republic of China discussed the issue of Hong Kong’s sovereignty in the 1980s. In 1984, the two countries signed the Sino-British Joint Declaration, agreeing to transfer the sovereignty of Hong Kong to the People’s Republic of China in 1997.[7] The declaration stipulated that Hong Kong would be governed as a special administrative region, retaining its laws and high degree of autonomy for at least fifty years after the transfer. Lacking confidence in the arrangement, some residents chose to emigrate from Hong Kong, particularly after the Tiananmen Square protests of 1989.

The Basic Law of Hong Kong, which would serve as the constitutional document after the transfer, was ratified in 1990. Over strong objections from Beijing, Governor Chris Patten introduced democratic reforms to the election process for the Legislative Council of Hong Kong. The transfer of the sovereignty of Hong Kong occurred at midnight on July 1, 1997, marked by a handover ceremony at the Hong Kong Convention and Exhibition Centre.[7] Tung Chee Hwa assumed office as the first Chief Executive of Hong Kong.

Hong Kong’s economy was affected by the Asian financial crisis of 1997 that hit many East Asian markets. The H5N1 avian influenza also surfaced in Hong Kong that year. Implementation of the Airport Core Programme led to the opening of the new Hong Kong International Airport in 1998, after six years of construction. The project was part of the ambitious Port and Airport Development Strategy that was drafted in the early 1980s.

The outbreak of Severe acute respiratory syndrome (SARS) took hold of Hong Kong in the first half of 2003.[10] That year, half a million people participated in a march to voice disapproval of the Tung administration and the proposal to implement Article 23 of the Basic Law, which had raised concerns over infringements on rights and freedoms. The proposal was later abandoned by the administration. In 2005, Tung submitted his resignation as chief executive. Donald Tsang, the Chief Secretary for Administration, was selected as chief executive to complete the term.

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Hong Kong consists primarily of Hong Kong Island, Lantau Island, Kowloon Peninsula and the New Territories as well as some 260 other islands. The Kowloon Peninsula is attached to the New Territories to the north, and the New Territories spans northwards eventually connecting with mainland China across the Sham Chun River (Shenzhen River). overall, Hong Kong encompasses a collection of 262 islands and peninsulas in the South China Sea. While Lantau is the largest island, Hong Kong Island is the second largest and the most populated. Ap Lei Chau is the most densely populated island in the world.

The name “Hong Kong”, which literally translates to mean “fragrant harbor”, is derived from the area around present-day Aberdeen on Hong Kong Island. This is an area where fragrant wood products and fragrant incense were once traded.[11] The narrow body of water which separates Hong Kong Island from the Kowloon Peninsula is known as Victoria Harbour and is one of the deepest natural maritime ports in the world.

Despite Hong Kong’s reputation of being intensely urbanised, the territory has made much effort to promote a green environment.[12] Much of the territory remains undeveloped as the terrain is mostly hilly to mountainous with steep slopes. Of the territory’s 1,104 square kilometres (426 square miles (1,103 km²)),[13] less than 25% is developed. The remaining land is remarkably green with about 40% of the landmass reserved as country parks and nature reserves.[14] Most of the territory’s urban development exists on the Kowloon peninsula, along the northern shores of Hong Kong Island and in scattered settlements throughout the New Territories.

Hong Kong’s long, irregular and curvaceous coastline also affords the territory with many bays, rivers and beaches. Despite the territory’s extensive wooded and ocean setting, environmental awareness is growing as Hong Kong’s air ranks as one of the most polluted. Approximately 80% of the city’s smog originates from other parts of the Pearl River Delta.[15]

Hong Kong is 60 kilometres (37 miles) east of Macau on the opposite side of the Pearl River Delta. It borders the city of Shenzhen in Guangdong Province to the north. The highest elevation in the territory is at Tai Mo Shan, at a height of 958 metres (3,142 ft) above sea level. Lowlands exist in the northwestern part of the New Territories.

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Hong Kong’s climate is subtropical and, for nearly half the year, tends toward temperate. The region is cloudy in January and February, meeting with the occasional cold fronts. In March and April, it is pleasant, with occasional high humidity. From May to August, the region is hot and humid, occasionally confronted with showers and thunderstorms. During November and December, there are pleasant breezes, with plenty of sunshine and comfortable temperatures.[16]

Hong Kong is most likely to be affected by tropical cyclones from July to September, although they are not unusual any time between May and November. An average of about 31 tropical cyclones form in the western North Pacific or China Seas yearly, half of them reaching typhoon strength. Winds increase and rain becomes heavy and widespread when the centre of a cyclone comes close to the city; the heavy rain may last for a few days, the subsequent landslips and flooding may cause more damage than the winds.[16]

The highest recorded temperature[17] in Hong Kong is 38 °C (100.0 °F) while the lowest recorded temperature is -4 °C (25.0 °F). Meanwhile, the highest and lowest temperatures ever recorded by the Observatory are respectively 36.1 °C (97.0 °F) on 19 August 1900 and 18 August 1990, and 0.0 °C (32.0 °F) on 18 January 1893. The average temperature[18] in the coldest month, January, is 16.1 °C (61.0 °F) while the average temperature in the hottest month, July, is 28.7 °C (83.7 °F). The territory is situated just south of the Tropic of Cancer, a similar latitude to that of Hawaii. In winter, strong and cold winds generate from the north cool the city; in the summer, the wind’s prevailing direction changes and brings the warm and humid air in from the southwest. This climate can support a tropical rainforest.

[hide]Weather averages for Hong Kong

Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year

Average high °C 18.6 18.6 21.5 25.1 28.4 30.4 31.3 31.1 30.2 27.7 24.0 20.3 25.6

Average low °C 14.1 14.4 16.9 20.6 23.9 26.1 26.7 26.4 25.6 23.4 19.4 15.7 21.1

Precipitation mm 24.9 52.3 71.4 188.5 329.5 388.1 374.4 444.6 287.5 151.9 35.4 34.5 2,382.70

Average high °F 65.5 65.5 70.7 77.2 83.1 86.7 88.3 88.0 86.4 81.9 75.2 68.5 78.1

Average low °F 57.4 57.9 62.4 69.1 75.0 79.0 80.1 79.5 78.1 74.1 66.9 60.3 70.0

Precipitation inch 0.98 2.06 2.81 7.42 12.97 15.28 14.74 17.50 11.32 5.98 1.39 1.36 93.81

Source: HKO[18] Jan 20, 2006

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The Legislative Council of Hong Kong

The Government House in Central where the Chief Executive resides

The Central Government Offices on Government Hill

Political activities in Central

Pursuant to the Basic Law, Hong Kong’s constitutional document, the local Hong Kong government retains sovereignty over the territory except in areas of national defence and foreign relations. The Chief Executive, the head of territory and head of government, is selected by the Chief Executive Election Committee composed of 800 members. Members of the Election Committee are evenly composed of four major sectors of Hong Kong society:[19]

The industrial, commercial and financial sectors

The professions

Labour, social services, religious and other sectors

Members of the Legislative Council, representatives of district-based organisations, Hong Kong deputies to the National People’s Congress, and representatives of Hong Kong members of the National Committee of the Chinese People’s Political Consultative Conference

Other functionaries of the government, including members the executive and legislative bodies, are either appointed by the Chief Executive or elected by voters.

Laws in Hong Kong are enacted only by approval of the Chief Executive and majority consent from the 60 seat Legislative Council of Hong Kong, or LegCo. Despite the often said undemocratic nature of Hong Kong’s government, half of LegCo’s seats are elected under universal suffrage with the other half selected by functional constituencies consisting of special interests and trade unions. The Basic Law guarantees that all seats will eventually be elected under universal suffrage.

Donald Tsang currently holds the office of the Chief Executive after his election on 16 June 2005 by the Election Committee.[20] Before the 1997 handover, Tsang had held the post of Financial Secretary under British rule. He was elevated to the post of Chief Secretary for Administration on 1st May 2001 when Anson Chan resigned her post. Donald Tsang assumed his current post on 24 June 2005 and as scheduled, completed the remaining portion of Tung Chee Hwa’s last term which ended on 30 June 2007 in accordance to the interpretation of Annex I and Article 46 by the Standing Committee of the National People’s Congress. He was re-elected as Chief Executive on 25th March 2007 for another five years - his new term started on 1st July 2007.

The election of the Chief Executive in 2005 was by the 852-member Election Committee was held on 10 July 2005. On 16 June 2005, Donald Tsang was acclaimed the winner as the only candidate securing the required 100 nominations from members of the election committee. Tung Chee Hwa, the first Chief Executive, assumed office on 1 July 1997, following his election by a 400-member electoral college. For the second five-year term of the Chief Executive which began in July 2002, Tung was the only nominated candidate and therefore acclaimed.

The PRC set up a Provisional Legislative Council (PLC) in 1996 just before the handover, where it moved to Hong Kong to have its meetings after the handover. It reverted some laws passed by the colonial Legislative Council, which was formed by means of universal suffrage since 1995. The PLC passed some new laws, such as the Public Order Ordinance,[21] which required permission from police to hold a demonstration where the number of people who participates exceeds 30. Legislative Council elections were held on 24 May 1998, on 10 September 2000 and again on 12 September 2004, with the next election scheduled for 2008. According to the Basic Law, Hong Kong’s “mini-constitution”, the present third term of the Legislative Council has 25 seats directly elected from geographical constituencies and 30 seats elected from functional constituencies. The 1998, 2000 and 2004 Legislative Council elections were seen as free, open, and widely contested, despite discontent among mainly ‘pro-democratic’ politicians, who contended that the functional constituency elections and the Election Committee elections (for 1998 and 2000) were undemocratic, as they consider that the electorate for these seats is too narrow.

The civil service of Hong Kong maintains its quality and neutrality following its tradition in the colonial times, operating without discernible direction from Beijing. Many government and administrative operations are located in Central on Hong Kong Island near the historical location of Victoria City, the site of the original British settlements.

The right of abode issue sparked debates in 1999, while the controversy over Hong Kong Basic Law Article 23 was the focus of politics in Hong Kong between 2002 and 2003, culminating in a peaceful mass demonstration (over 500,000 demonstrators) on 1 July 2003, after which the government still tried to pass the law to the Legislative Council. But one of the major pro-government parties refused to vote for passing the bill. Thus the government found that the bill could not be passed. So it shelved[22] the drafted law[23] brought forth by Article 23. The focus of controversies shifted to the issue of universal suffrage towards the end of 2003 and in 2004, which was the slogan of another mass demonstration on 1 July 2004.[24][25]

On 24 September 2005, 25 Hong Kong pro-democracy LegCo members, some of whom were previously labelled as traitors by Beijing after the 1989 Tiananmen Square crackdown and barred from entering the mainland, crossed the border into the southern province of Guangdong, following an unprecedented invitation by the PRC.[26] The invitation was generally regarded as one of the greatest goodwill gestures from the PRC to the Hong Kong democrats since the Tiananmen Square massacre.

On 4 December 2005, a demonstration was organised by the Civil Human Rights Front and pro-democracy lawmakers to demand a timetable for universal suffrage to be included in political reform proposals for the 2007 and 2008 elections for the Chief Executive and the Legislative Council respectively. The turnout was reported to be 63,000 by the police, and at least 250,000 by the organisers. The proposals would have doubled the size of the election committee (from 800 members to 1,600) and added ten seats to the Legislative Council (5 geographic and 5 functional seats for district councillors). On 22 December 2005, the reforms, proposed by the Chief Executive of Hong Kong, Donald Tsang, were defeated by the pro-democracy camp after they failed to reach the necessary two-third threshold with 34 votes in favour and 24 opposed. In the wake of the defeat, China and the Chief Executive have indicated that reforms will not be possible until the 2012 elections. The defeat also did little to blunt Tsang’s popularity, with his approval ratings only dropping from 82 to 79% in the wake of the vote.

While Hong Kong is not an independent country, it retains its own delegation in international organisations such as the Asia-Pacific Economic Cooperation and the Olympic Games, although it changed its official name in these functions from “Hong Kong” to “Hong Kong, China” after 1997. Hong Kong also participates in international events by including a delegate with the PRC’s representative group.

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The Court of Final Appeal in Central

An assembly of Hong Kong judges

In contrast to mainland China’s civil law system, Hong Kong continues to follow the common law tradition established by British colonial rule. Article 84 of the Basic Law of Hong Kong allows Hong Kong’s courts to refer to decisions (precedents) rendered by courts of other common law jurisdictions. Articles 82 and 92 allow judges from other common law jurisdictions to participate in proceedings of Hong Kong’s Court of Final Appeal and sit as Hong Kong judges.

Structurally, Hong Kong’s court system consists of the Court of Final Appeal which replaced the Judicial Committee of the Privy Council, the High Court, which is made up of the Court of Appeal and the Court of First Instance, and the District Court, which includes the Family Court. Other adjudicative bodies include the Lands Tribunal, the Magistrates’ Courts, the Juvenile Court, the Coroner’s Court, the Labour Tribunal, the Small Claims Tribunal, and the Obscene Articles Tribunal, which is responsible for classifying non-video pornography to be circulated in Hong Kong. Justices of the Court of Final Appeal are appointed by Hong Kong’s Chief Executive. The Basic Law of Hong Kong is subject to interpretation by the Standing Committee of the National People’s Congress (NPC:SC) and this power has been invoked three times: the right of abode issue, an interpretation regarding post-2008 election procedures, and an interpretation regarding the length of the term of the Chief Executive.

As in England, lawyers in Hong Kong are classified as either barristers or solicitors, where one can choose to practice as either one but not both (but it is possible to switch from one to another.) The vast majority of lawyers are solicitors, who are licensed and regulated by the Law Society of Hong Kong. Barristers, on the other hand, are licensed and regulated by the Hong Kong Bar Association. Only barristers are allowed to appear in the Court of Final Appeal and the High Court. Just as the common law system is maintained, so are British courtroom customs such as the wearing of robes and wigs by both judges and lawyers.

According to the Article 63 of the Basic Law of Hong Kong, the Department of Justice controls criminal prosecutions, free from any interference. It is the largest legal institution in Hong Kong, and its responsibilities involve legislation, judicial administration, prosecution, civil representation, legal and policy drafting and reform, and the legal profession. Aside from prosecuting criminal cases in Hong Kong, officials of the Department of Justice also appear in court on behalf of the government in all civil and administrative lawsuits against the government. As the protector of public interests, it may apply for judicial reviews and assign legal representation on behalf of public interest to take part in the trial of cases that involve material public interests

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Hong Kong is subdivided into 18 geographic districts for administrative purposes:

Central and Western

Eastern

Islands

Kowloon City

Kwai Tsing

Kwun Tong

North

Sai Kung

Sha Tin

Sham Shui Po

Southern

Tai Po

Tsuen Wan

Tuen Mun

Wan Chai

Wong Tai Sin

Yau Tsim Mong

Yuen Long

Each district is represented by a District Council that advises the Government of Hong Kong on local matters such as public facilities, community programmes, cultural activities and environmental improvements. The Home Affairs Department is the governmental body responsible for coordinating services and communicating government policies and plans to the public. It interacts with the public at the local level through corresponding district offices.

There are no formal definitions for cities and towns in Hong Kong. The historic boundaries of Victoria City, Kowloon and New Kowloon are stated in law, but these entities no longer possess any legal or administrative status.

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2 International Finance Centre, the tallest building in Hong Kong

Hong Kong maintains a highly capitalist economy built on a policy of free market, low taxation and government non-intervention.[28] It is an important centre for international finance and trade, with the greatest concentration of corporate headquarters in the Asia-Pacific region. In terms of gross domestic product per capita and gross metropolitan product, Hong Kong is the wealthiest urban centre in the People’s Republic of China. The GDP (PPP) per capita of Hong Kong exceeds the four big economies in Western Europe (UK, France, Germany, Italy), as well as Japan.

Continuing the practice established under the British administration, the Government of Hong Kong mostly leaves the direction of the economy to market forces and the private sector. Since 1980, the government has generally played a passive role under the official policy of positive non-interventionism. Hong Kong has often been cited as a prime example of laissez-faire capitalism in practice, most notably by economist Milton Friedman. It has ranked as the world’s freest economy in the Index of Economic Freedom for 13 consecutive years, since the inception of the index in 1995.[29][30] It also places first in the Economic Freedom of the World Report.[31]

Hong Kong has little arable land and few natural resources within its borders, and must therefore import most of its food and raw materials. Hong Kong is the world’s eleventh largest trading entity,[32] with the total value of imports and exports exceeding its gross domestic product. As of 2007, there are 115 countries that maintain consulates in Hong Kong, more than any other city in the world. Much of Hong Kong’s exports consists of re-exports, which are products made outside of the territory, especially in mainland China, and distributed through Hong Kong. Even before the transfer of sovereignty to the People’s Republic of China, Hong Kong has established extensive trade and investment ties with mainland China. The territory’s autonomous status enables it to serve as a point of entry for investments and resources flowing into the mainland. It is also a connecting point for flights from the Republic of China on Taiwan destined for the mainland.

The currency used in Hong Kong is the Hong Kong dollar. Since 1983, it has been pegged at a fixed exchange rate to the United States dollar. The currency is allowed to trade within a range between 7.75 and 7.85 Hong Kong dollars to one United States dollar. The Hong Kong Stock Exchange is the sixth largest in the world, with a market capitalisation of about US$2.97 trillion as of October 2007. In 2006, the value of initial public offerings conducted in Hong Kong was second highest in the world after London.[33] The City of London Corporation’s Global Financial Centres Index (GFCI) 2007, which evaluates the competitiveness of 46 financial centres worldwide, ranks Hong Kong as the third-best financial centre globally and the strongest centre in Asia.[34]

Hong Kong’s economy is dominated by services, which accounts for over 90 percent of its gross domestic product. In the past, manufacturing had been the most important sector of the economy, as Hong Kong industrialised following the Second World War. Driven by exports, the economy grew at an average annual rate of 8.9 percent in the 1970s. Hong Kong underwent a rapid transition to a service-based economy in the 1980s, when growth averaged 7.2 percent annually. Much of the manufacturing operations moved to mainland China during this period, and industry now constitutes just 9 percent of the economy. As Hong Kong matured to become a financial centre, growth slowed to an average of 2.7 percent annually in the 1990s. Together with Singapore, South Korea, and Taiwan, Hong Kong is known as one of the Four Asian Tigers, or Dragons for its high growth rates and rapid industrialisation between the 1960s and the 1990s.[35]

The economy suffered a 5.3 percent decline during 1998, in the aftermath of the Asian financial crisis. A period of recovery followed, with growth rate reaching 10 percent in 2000, although deflation persisted. In 2003, the economy was greatly affected by the outbreak of SARS, which reduced economic growth to 2.3 percent that year. A revival of external and domestic demand led to a strong recovery the following year, as cost declines strengthened Hong Kong export competitiveness. The 68-month-long deflationary period ended in mid-2004, with consumer price inflation hovering at near zero levels.[36] Beginning in 2003, the Individual Visit Scheme has allowed travellers from some cities in mainland China to visit Hong Kong without an accompanying tour group. As a result, the tourism industry of Hong Kong has benefitted from an increase in mainland visitors, further aided by the opening of Hong Kong Disneyland Resort in 2005. The economy continues to grow strongly with the return of consumer confidence and rising trade. Hong Kong has set low rates in both personal and corporate taxation.

In 2006, Hong Kong’s per-capita GDP ranked as the 6th highest in the world at US$38,127, ahead of countries such as Switzerland, Denmark, and Japan.[37] Its GDP ranked as the 40th highest at US$253.1 billion.

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Sai Yeung Choi Street South, the most crowded street in Mong Kok

Hong Kong’s population increased sharply throughout the 1990s, reaching 6.99 million in 2006.[38] About 95% of Hong Kong’s population is of Chinese descent, the majority of which are Cantonese or from ethnic groups such as Hakka and Teochew. Cantonese, a Chinese language originating from Guangdong province to the north of Hong Kong, is Hong Kong’s official dialect. English is also an official language widely spoken by more than 38% of the population. According to the 1996 Hong Kong Government by-census, some 3.1% regard English as their ‘usual’ language with 34.9% claiming to speak English as ‘another’ language.[39] Signs displaying both Chinese and English are extremely common throughout the territory. Since the 1997 handover, new groups of mainland China immigrants have arrived. The usage of Mandarin (putonghua), the official dialect of mainland China and Republic of China (Taiwan), has also increased. The integration with mainland economy led to a demand in Mandarin speakers.

The remaining 5% of the population is composed of non-ethnic Chinese forming a highly visible group despite their smaller numbers. A South Asian population comprised of Indians, Pakistanis and Nepalese are found. Vietnamese refugees have become permanent residents. Approximately 140,000 Filipinos live and work in Hong Kong with the majority as foreign domestic helpers. An increasing number of domestic workers also originate from Indonesia. There are also a number of Europeans, Americans, Australians, Canadians, Japanese, and Koreans working in Hong Kong’s commercial and financial sector.

Considered as a dependency, Hong Kong is one of the most densely populated countries/dependencies in the world, with an overall density of more than 6,200 people per km². Hong Kong has a fertility rate of 0.95 children per woman,[40] one of the lowest in the world and far below the 2.1 children per woman required to sustain the current population. However, population in Hong Kong continues to grow due to the influx of immigrants from mainland China approximating 45,000 per year. Life expectancy in Hong Kong is 81.6 years as of 2006, 2nd highest in the world.

Hong Kong’s population has an extremely dense urban core, consisting of Kowloon and the north of Hong Kong Island. The rest is relatively sparsely populated, with millions of residents scattered irregularly throughout the New Territories, south Hong Kong island and Lantau Island. An increasing number of citizens are living in Shenzhen, and commuting from mainland China.

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