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Hong Kong

 Flag of Hong Kong

Region Name: The Hong Kong Special Administrative Region (SAR) of China

Last reviewed: 12 December 2006

Country information

Map of Kong Kong

Area: 1,098 square kilometres (424 square miles)
Population: 6.8419millions (mid-2004)
People: Chinese 99%, 1% other
Languages: Chinese (mainly Cantonese), English
Religion: Buddhism and Taoism (majority), Christianity, Islam, Hinduism, Sikhism, Judaism
Currency: The Hong Kong Dollar, which is pegged to the US Dollar.
Major Political Parties: Democratic Alliance for the Betterment of Hong Kong, Liberal Party, Democratic Party and Civic Party
Government: The head of the Hong Kong SAR Government is the Chief Executive.
Head of State (President of China): Hu Jintao
Chief Executive: Donald Tsang
Chief Secretary for Administration: Rafael Hui
Financial Secretary: Henry Tang

ECONOMY

Basic Economic Facts

GDP: HK$649.3 billion (First half of 2005 - current market prices)
GDP Growth: 6.8% ( Q3 2006)
GDP per capita: HK$187,547 (2004)
Unemployment: 4.5 (August to October 2006 - seasonally-adjusted)
Currency: The Hong Kong Dollar is pegged to the US Dollar. HK$7.8 = $1.
British exports to Hong Kong (2004 figures): £2.2bn
British imports from Hong Kong (2004): £5.4bn
Total British investment in Hong Kong: £9.0bn in 2004.

UK Trade & Investment Country Profile: Hong Kong

Hong Kong is one of the world's leading trading and financial centres. It is the eleventh largest trader in the world and, according to the United Nations Conference on Trade and Development (UNCTAD), it is the largest source of foreign direct investment amongst Asian economies and the 7th largest in the world. Manufacturing makes up less than 5% of its GDP, with services making up around 85%.

Hong Kong's economy is now fully recovered from the global slowdown of 2001 and the outbreak of Severe Acute Respiratory Syndrome (SARS) in Spring 2003. It also survived the Asian economic crisis and bird flu, and bullish economic indicators in 2004 translated into a feel-good factor that continues to be felt today.

Real GDP rose by 6.6% in the first half of 2006. The Government has recently revised its GDP growth forecast for the year to 6.5% from 4-5% - remarkable for a developed economy with GDP per capita income of more than $25,000 US. This follows even higher growth in 2004 (8.6%) and 2005 (7.3%).

Economic assistance from Beijing, notably the Closer Economic Partnership Agreement (CEPA) which established a form of free trade area between the mainland and Hong Kong and the individual visit scheme (IVS) which made it easier for mainlanders to visit Hong Kong, helped fuel the recovery and develop closer economic ties with the mainland.

Tourism and trade are the key drivers of growth, with visitor arrivals (most of whom come from mainland China) at an all time high of 23.4million in 2005. Retail sales have also recorded positive growth since August 2003.

At the same time, China has benefited from Hong Kong's massive investment of capital and expertise in the mainland. Hong Kong is the largest external investor in every mainland province.

And as the Chinese economy has taken off, more and more Chinese firms, in various sectors, have used Hong Kong to access the international equity capital market. Total market capitalisation of mainland companies listed on the Hong Kong Stock Exchange is in the region of HK$ 4 trillion (£270 billion). October saw the world's biggest ever initial public offering (IPO) when the largest mainland bank, Industrial and Commercial Bank of China (ICBC), listed its shares simultaneously in Hong Kong and Shanghai.

The Hong Kong and Chinese economies have become increasingly interdependent. Hong Kong is the most important gateway for the Chinese mainland, handling around 22% of China's foreign trade, and is its third largest trading partner.

HISTORY

The Hong Kong Special Administrative Region of China (SAR) covers an area of 1,098 square kilometres (424 square miles) on the southern coast of China. It comprises Hong Kong Island, Kowloon and the New Territories, and about 235 outlying islands. Hong Kong's harbour, strategically located on the primary Far Eastern trade routes, facilitated Hong Kong's development as one of the greatest trading ports in the Asia-Pacific Region.

Hong Kong was occupied by the British in 1841. A year later Hong Kong Island was ceded by China to Britain under the Treaty of Nanking (Nanjing). In 1860, other territories such as Kowloon and Stonecutters Island were ceded under the Treaty of Peking. In 1898, China leased the New Territories to Britain for 99 years.

The period following the Second World War saw an influx of immigrants from Mainland China which helped swell the population, and by the 1970s Hong Kong had become an Asian economic powerhouse.

China came to view the Treaties under which Hong Kong had been ceded to Britain as unequal and unfair. In 1982 Britain and China entered negotiations over Hong Kong's future, which eventually led two years later to the signing of the Sino-British Joint Declaration on the Question of Hong Kong (the Joint Declaration).

The Joint Declaration outlined the 'One Country, Two Systems' model for the Hong Kong SAR under which Hong Kong would return to Chinese sovereignty. It provided that Hong Kong's capitalist system and way of life would remain unchanged for 50 years; and that Hong Kong would have a high degree of autonomy, except in foreign affairs and defence, which would be the responsibility of the Chinese Government.

A 'mini-constitution', known as the Basic Law, was established and promulgated in 1990. It sets out, among other things, the relationship between the Chinese Government and the Hong Kong SAR Government, the fundamental rights and duties of the Hong Kong people and the SAR's political structure. It also contains provisions on the interpretation and amendment of its Articles.

On 1 July 1997, in accordance with the Joint Declaration Hong Kong was handed over to Chinese sovereignty. Hong Kong then became the Hong Kong Special Administrative Region of the People's Republic of China.

Generally the British government has assessed that the 'One Country, Two Systems' model enshrined in the Joint Declaration has worked well in practice. There is a lot to be satisfied with in respect of Hong Kong's economic and social development since the handover, although we believe there is still a need to make progress towards full universal suffrage, as envisaged in the Basic Law. We have called for the introduction of full universal suffrage as soon as possible.

Hong Kong historical timeline

  • 1841: Hong Kong occupied by the British
  • 1842: Hong Kong Island ceded by China to Britain under the Treaty of Nanking (Nanjing)
  • 1860: Kowloon and Stonecutters Island ceded to Britain under the First Convention of Peking (Beijing)
  • 1898: New Territories leased from China for 99 years under the Second Convention of Peking (Beijing)
  • 1941: Japanese occupy Hong Kong
  • 1945: Hong Kong liberated from Japanese occupation
  • 1982: Negotiations open between Britain and China on the future of Hong Kong
  • 1983: Hong Kong Dollar pegged to US Dollar
  • 1984: Sino-British Joint Declaration on Hong Kong
  • 1985: Joint Declaration enters into force and registered with the UN. First meeting of Sino-British Joint Liaison Group
  • 1986: Visit by Her Majesty the Queen and His Royal Highness Prince Philip
  • 1990: Basic Law promulgated
  • 1997: Handover of Hong Kong from Britain to China. Hong Kong becomes a Special Administrative Region of China (midnight 30 June). C H Tung appointed Chief Executive for a five-year term
  • 1998: Chek Lap Kok airport opened
  • 2002: Chief Executive, C H Tung, re-appointed for a second 5-year term
  • 2003: SARS crisis. Mass demonstration on 1 July, primarily against national security bill under Article 23 of the Basic Law. Bill later withdrawn
  • 2004: Chief Executive announces establishment of a task force to examine and review constitutional development in the territory after 2007
  • 2004: On 26 April the Standing Committee of the National Peoples Congress "interpreted" two aspects of the Basic Law which effectively set limits on constitutional reform
  • 2004: On 1 July a substantial number of people marched peacefully through the street. The march's single main theme was call for early progress towards universal suffrage
  • 2004: 12 September: Legislative Council elections held
  • 2005: 10 March: C H Tung resigns, citing reasons of ill health
  • 2005: 21 June: Donald Tsang formally appointed as Chief Executive
  • 2005: 13-18 December: WTO Ministerial held in Hong Kong. 

INTERNATIONAL RELATIONS

The UK's relations with Hong Kong

Nearly ten years on from the formal return of Hong Kong to Chinese sovereignty, the UK enjoys a positive, forward looking relationship with The Hong Kong SAR Government, and mutually beneficial co-operation in a wide range of areas.

A lot of our historic ties and affinities still endure. There are around 3.6million British passport-holders in Hong Kong, 3.44million of whom are British Nationals (Overseas) (BN(O)s). BN(O) passport holders enjoy British consular protection in third countries (and, for non-Chinese BN(O) passport holders, in Hong Kong and mainland China), as well as visa-free access to the UK for visits of less than six months.

Our Consulate-General in Hong Kong is the largest British consulate in the world - bigger than most British embassies - and it includes the largest British passport-issuing operation outside the UK. Our Consul-General is Mr Stephen Bradley.

Britain was the top long-haul destination for Hong Kong travellers in 2005 with over 238,000 visits, and many more Hong Kong residents visited the UK than all other European destinations put together.

At any one time there are around 20,000 Hong Kong students studying in the UK, and the British Council's teaching operation in Hong Kong is its largest anywhere in the world.

And Hong Kong continues to be a major business partner for the UK. It is important as a very significant market in its own right and also as the principal gateway into, and increasingly, out of mainland China, particularly the Pearl River Delta (PRD).

Hong Kong and the UK have benefited hugely from globalisation. But we are also working together to tackle many of the serious challenges that it presents. We have developed close co-operation on law enforcement issues, including customs, drugs and illegal immigration.

The Foreign Secretary reports to Parliament every six months on developments in Hong Kong, and gives our assessment of how well the 'one country, two systems' model outlined in the Sino-British Joint Declaration on the Question of Hong Kong is working in practice. 

Visits

The frequency of senior visitors representing both HMG and British business demonstrates the importance we attach to Hong Kong. This year has seen visits by:

  • John Prescott, the Deputy Prime Minister
  • Alderman David Brewer, the Lord Mayor of the City of London
  • Rhodri Morgan, the first Minister for Wales,
  • Ian McCartney and Ian Pearson (Ministers for Trade)
  • HRH the Duke of York
  • The House of Commons Foreign Affairs Committee
  • Tom McCabe, the Scottish Executive
  • the Lord Chancellor
  • Ed Balls, Economic Secretary to the Treasury.
  • Alastair Darling, Secretary of State for Trade and Industry.

Chief Executive Donald Tsang visited the UK between 2-5 November 2005 calling on the Prime Minister, Lord Falconer, the Secretary of State for Constitutional Affairs and Lord Chancellor, and Minister for Trade Ian Pearson. The Chief Executive was also a keynote speaker at the Wilton Park Conference on 'The Future Role of Hong Kong in the Region'.

GEOGRAPHY

Climate

Hong Kong has a subtropical climate with hot, wet summers and cool, dry winters.

TRADE AND INVESTMENT

UK/Hong Kong Trade

Britain has a clear stake in Hong Kong's continuing prosperity:

  • Hong Kong is the UK's 14th largest export market and 2nd largest in the Asia Pacific region after Japan, with exports in 2005 of £3.1bn, up 17.5% on 2004
  • But UK exports in Jan - Sep 2006 were £2.1 bn, down 3.9% on the same period in 2005.
  • Hong Kong is also a major gateway for our exports into China: 19% of our exports to China pass through Hong Kong
  • UK imports from Hong Kong were worth £6.7 bn in 2005, up 14% on 2004
  • Jan - Sep 06 imports were worth £5.3 bn, up 14.5% on the same period in 2005
  • The UK is the largest European exporter to Hong Kong
  • Further information can be found on the UK Trade & Investment website.

UK Trade & Investment

POLITICS

The Chief Executive

The head of the Hong Kong SAR Government is the Chief Executive. In March 2005 Mr Tung Chee-hwa (CH Tung), Hong Kong's first Chief Executive, resigned citing ill health. In accordance with the Basic Law, the then Chief Secretary, Donald Tsang, became Acting Chief Executive.

Several weeks of debate in Hong Kong followed about whether the new Chief Executive should serve a full five year term or the remaining two years of CH Tung's term. In the end, the SAR Government asked the National People's Congress Standing Committee (NPCSC) of the People's Republic of China to interpret the article of the Basic Law (Article 53) dealing with the office of Chief Executive becoming vacant. The NPCSC ruled that the new Chief Executive should serve the remainder of CH Tung's term, that is, until 2007.

Donald Tsang was the only candidate to receive the required minimum number of nominations from the Election Committee that chooses Hong Kong's Chief Executive, and was appointed Chief Executive by the Central People's Government in Beijing for a two-year term on 21 June 2005.

The Executive Council (ExCo)

The Executive Council helps the Chief Executive to make important policy decisions and to draw up subsidiary legislation. It has 14 official members (the heads of the Government Departments) and 7 non-official members.

The 'officials' are political appointees on fixed term contracts. They are 'accountable' to the Chief Executive (who can sack them for serious mistakes) and they serve for a period no longer than that of the Chief Executive who appointed them.

The Legislature (LegCo)

The Legislative Council (LegCo), Hong Kong's parliament, has 60 members. 30 members are returned by geographical constituencies through direct elections and 30 are returned by functional constituencies that represent different sectors of the community.

The most recent LegCo election was held in September 2004. It was the third LegCo election since the handover, and had the highest proportion of directly elected legislators: 50%, up from 40% (24 out of 60) in 2000 and 33.3% (20 out of 60) in 1998.

LegCo's main functions are to:

  • enact laws
  • examine and approve Government budgets, taxation and public expenditure
  • monitor the performance of the Government
  • endorse the appointment (and removal) of judges of the Court of Final Appeal and the Chief Judge of the High Court; and
  • debate issues of public interest.

The Judiciary

Hong Kong's legal system is based on English Common Law and has remained largely unchanged since the handover. The most significant change then was the establishment of the Court of Final Appeal (which replaced the Judicial Committee of the Privy Council in London as the highest appellate court in Hong Kong). The Joint Declaration and Basic Law provide that the courts will exercise judicial power independently and free from interference. Serving members of the House of Lords continue to sit as non-permanent members of the Court of Final Appeal.

Constitutional development

The Basic Law provides for constitutional development from 2007 to give Hong Kong people a more accountable and representative Government. It lays down the ultimate aims of the election of the Chief Executive and all members of the Legislative Council by universal suffrage, although there is no timetable for reaching this goal.

The pressure for early progress to a more democratic form of government increased following major demonstrations in July 2003 and on 1 January 2004. In January 2004 the Chief Executive formed a Task Force on constitutional reform to study the detailed provisions in the Basic Law and consult with the Central authorities in Beijing before taking things further.

In April 2004 the NPCSC interpreted two aspects of the Basic Law dealing with the procedures for electing the Chief Executive (from 2007) and the LegCo (from 2008). The interpretation did not rule out changes in 2007, but said that any changes had first to be cleared with the NPC. It ruled that universal suffrage in 2007/8 would not be allowed and that while the system for electing LegCo used in the 2004 elections could be adapted, the ratio of functional to directly elected seats (50-50) must remain the same.

Former Foreign Office Minister Bill Rammell expressed our concern that the interpretation was inconsistent with Hong Kong's high degree of autonomy; and disappointment that the NPC had set limits to constitutional development in Hong Kong above those required by the Basic Law.

On 1 July 2004, there was another mass demonstration through the streets of Hong Kong, calling for progress towards a more representative system of government.

The Taskforce's final report issued on 19 October 2005. The broad recommendations included expanding LegCo from 60 to 70 seats for the 2008 LegCo election, and expanding the Election Committee from 800 members to 1600 for the 2007 Chief Executive Election. 

The proposals did not go far enough to satisfy the demands of the pro-Democracy camp. In December 2005 an estimated 90,000 people marched in protest, demanding a timetable for universal suffrage.

When the proposals were put before LegCo on 21 December 2005 a blocking minority of pro-democracy legislators ('pan-democrats') voted the package down.

The SAR Government has stated that it will not propose further reforms for elections in 2007/8. Elections will continue to be held under the current procedures and no reform can take place until the elections in 2012 at the earliest.

We remain firmly committed to democracy in Hong Kong. We believe that Hong Kong should advance to a system of universal suffrage, as envisaged by the Basic Law, as soon as possible.

Education

The British Government's Chevening Scholarship Scheme has operated in Hong Kong since 1996, giving young people with leadership potential the opportunity to develop their academic and management skills in the UK. In total, around 30-40 Chevening Scholarships are awarded in Hong Kong each year.

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Contacts

Hong Kong, British Consulate-General

Address:

1 Supreme Court Road
Hong Kong

Telephone:

(+852) 2901 3182 UK Trade & Investment
(+852) 2901 3277 Press & Public Affairs
(+852) 2901 3281 Consular
(+852) 2901 3222 Passport

Fax:

(+852) 2901 3066

Office hours:

Office hours, Monday-Friday:
08:30-17:15 (Local time)
00:30-09:15 (GMT)

Public opening hours ›

Website: http://ukinhongkong.fco.gov.uk/en/

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