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Hong Kong

Background: Occupied by the UK in 1841, Hong Kong was formally ceded by China the following year; various adjacent lands were added later in the 19th century. Pursuant to an agreement signed by China and the UK on 19 December 1984, Hong Kong became the Hong Kong Special Administrative Region (SAR) of China on 1 July 1997. In this agreement, China has promised that, under its “one country, two systems” formula, China’s socialist economic system will not be practiced in Hong Kong and that Hong Kong will enjoy a high degree of autonomy in all matters except foreign and defense affairs for the next 50 years.
Dependency status: special administrative region of China
Currency: 1 Hong Kong dollar (HK$) = 100 cents

Geography of Hong Kong

Location: Eastern Asia, bordering the South China Sea and China
Geographic coordinates: 22 15 N, 114 10 E
total: 1,092 sq. km
land: 1,042 sq. km
water: 50 sq. km
Land boundaries:
total: 30 km
border countries: China 30 km
Coastline: 733 km
Maritime claims:
territorial sea: 3 nm
Climate: tropical monsoon; cool and humid in winter, hot and rainy from spring through summer, warm and sunny in fall
Terrain: hilly to mountainous with steep slopes; lowlands in north
Elevation extremes:
lowest point: South China Sea 0 m
highest point: Tai Mo Shan 958 m
Natural resources: outstanding deep-water harbor, feldspar
Land use:
arable land: 6%
permanent crops: 1%
permanent pastures: 1%
forests and woodland: 20%
other: 72% (1997 est.)
Irrigated land: 20 sq. km (1997 est.)
Natural hazards: occasional typhoons
Environment – current issues: air and water pollution from rapid urbanization
Environment – international agreements: party to:  Marine Dumping (associate member), Ship Pollution (associate member)
Geography – note: more than 200 islands

People of Hong Kong

Hong Kong’s population has increased steadily over the past decade, reaching about 6.8 million by 1999. Hong Kong is one of the most densely populated areas in the world, with an overall density of some 6,300 people per square kilometer.

Cantonese, the official Chinese dialect, is spoken by most of the population. English, also an official language, is widely understood; it is spoken by more than one-third of the population. Every major religion is practiced in Hong Kong; ancestor worship is predominant due to the strong Confucian influence.

All children are required by law to be in full-time education between the ages of 6 and 15. Preschool education for most children begins at age 3. Primary school begins normally at the age of 6 and lasts for 6 years. At about age 12, children progress to a 3-year course of junior secondary education. Most stay on for a 2-year senior secondary course, while others join full-time vocational training. More than 90% of children complete upper secondary education or equivalent vocational education.

Population: 6,898,686 (July 2005 est.)
Age structure:
0-14 years:  17.73%
15-64 years:  71.52% 
65 years and over:  10.75%
Population growth rate: .65% 
Birth rate: 11.13 births/1,000 population 
Death rate: 6.02 deaths/1,000 population 
Net migration rate: 7.9 migrant(s)/1,000 population 
Infant mortality rate: 5.83 deaths/1,000 live births 
Life expectancy at birth:
total population:  79.67 years
male:  76.97 years
female:  82.55 years
Total fertility rate: 1.29 children born/woman 
noun: Chinese
adjective: Chinese
Ethnic groups: Chinese 95%, other 5%
Religions: eclectic mixture of local religions 90%, Christian 10%
Languages: Chinese (Cantonese), English; both are official
definition: age 15 and over has ever attended school
total population: 92.2%
male: 96%
female: 88.2% (1996 est.)

History of Hong Kong

According to archaeological studies initiated in the 1920s, human activity on Hong Kong dates back over five millennia. Excavated Neolithic artifacts suggest an influence from northern Chinese Stone-Age cultures, including the Longshan. The territory was settled by Han Chinese during the seventh century, A.D., evidenced by the discovery of an ancient tomb at Lei Cheung Uk in Kowloon. The first major migration from northern China to Hong Kong occurred during the Ching Dynasty (960-1279). The British East India Company made the first successful sea venture to China in 1699, and Hong Kong’s trade with British merchants developed rapidly soon after. After the Chinese defeat in the First Opium War (1839-42), Hong Kong was ceded to Britain in 1842 under the Treaty of Nanking. Britain was granted a perpetual lease on the Kowloon Peninsula under the 1860 Convention of Beijing, which formally ended hostilities in the Second Opium War (1856-58). The United Kingdom, concerned that Hong Kong could not be defended unless surrounding areas were also under British control, executed a 99-year lease of the New Territories in 1898, significantly expanding the size of the Hong Kong colony.

In the late 19th century and early 20th centuries, Hong Kong developed as a warehousing and distribution center for U.K. trade with southern China. After the end of World War II and the communist takeover of Mainland China in 1949, hundreds of thousands of people emigrated from China to Hong Kong. This helped Hong Kong become an economic success and a manufacturing, commercial, and tourism center. High life expectancy, literacy, per capita income, and other socioeconomic measures attest to Hong Kong’s achievements over the last four decades.

On July 1, 1997, China resumed the exercise of sovereignty over Hong Kong, ending more than 150 years of British colonial control. Hong Kong is a Special Administrative Region of the People’s Republic of China with a high degree of autonomy in all matters except foreign and defense affairs. According to the Sino-British Joint Declaration (1984) and the Basic Law–Hong Kong’s mini-constitution–for 50 years after reversion Hong Kong will retain its political, economic, and judicial systems and unique way of life and continue to participate in international agreements and organizations under the name, “Hong Kong, China.”

Hong Kong Economy

Hong Kong, as the world’s tenth-largest trading entity and ninth-largest banking center, is one of the world’s most open and dynamic economies. Per capita GDP approximates Great Britain’s. Hong Kong’s banking system is sound, and the government has massive reserves. The economy suffered its worst recession in 30 years during the Asian financial crisis. GDP recovered strongly in 2000, growing at 10.5%, but the collapse of consumer demand in the United States and Europe interrupted that recovery, dragging the economy into recession in 2001. Strong economic growth in China will buffer Hong Kong to some extent from the global economic slowdown, especially as compared to its rivals Singapore and Taiwan. However, increasing unemployment (now 5.3%) and uncertainty about the future have created a growing popular unease. In response to these economic difficulties, the government unveiled a series of modest stimulus measures in October 2001, including infrastructure expenditures, small tax cuts, and development funds for small and medium enterprises. Authorities generally resisted pressure for largescale government expenditures to stimulate the economy. The deficit for fiscal year 2001-02 will be considerably larger, primarily because of declining revenues caused by the economic downturn.

Over the long term Hong Kong enjoys a number of positive economic factors, including accumulated public and private wealth from decades of unprecedented growth, virtually no public debt, a strong legal system, and an able and rigorously enforced anti-corruption regime. The need for restructuring and redefinition–possibly as a high-tech, information center–as Hong Kong’s advanced, high-cost, service-based economy continues to evolve, poses difficult challenges and choices for the government. Hong Kong is endeavoring to improve it competitiveness, especially in preparation for China’s entry into the WTO, and continues to refine its financial architecture. U.S. companies have a generally favorable view of Hong Kong’s business environment, including its legal system and the free flow of information, low taxation, and infrastructure. The American Chamber of Commerce’s annual business confidence survey, released in December 2000, reflects what was then an emerging economic recovery, with 95% indicating the outlook for 2001 was “good” or “satisfactory”–compared to 85% last year. Survey results showed a positive outlook through 2005.

On the international front, Hong Kong is an active member of the World Trade Organization (WTO) and the Asia Pacific Economic Cooperation (APEC) forum, where it is an articulate and effective champion of free markets and reduction of trade barriers. Despite growing competition from the Mainland, Hong Kong residents across the political spectrum have supported China’s accession to the WTO, believing this will open new opportunities on the Mainland for local firms and will stabilize relations between Hong Kong’s two most important trade and investment partners, the United States and China.

GDP: purchasing power parity – purchasing power parity – $181 billion (2000 est.)
GDP – real growth rate: 10.5% (2000 est.)
GDP – per capita: purchasing power parity – $25,400 (2000 est.)
GDP – composition by sector:
agriculture:  0.1%
industry:  14.3%
services:  85.6% (1999 est.)
Inflation rate (consumer prices): 3.7% (2000 est.)
Labor force: 3.39 million (2000 est.)
Labor force – by occupation: wholesale and retail trade, restaurants, and hotels 31.5%, community and social services 24%, financing, insurance, and real estate 14.5%, transport and communications 11.6%, manufacturing 7.7%, construction 2.6% (October 1999)
Unemployment rate: 5.3% (2001 est.)
revenues:  $20.8 billion
expenditures:  $24.5 billion, including capital expenditures of $NA (FY99/00)
Industries: textiles, clothing, tourism, electronics, plastics, toys, watches, clocks
Industrial production growth rate: 2.1% (2000)
Electricity – production: 27.726 billion kWh (1999)
Electricity – production by source:
fossil fuel: 100%
hydro: 0%
nuclear: 0%
other: 0% (1999)
Agriculture – products: fresh vegetables; poultry
Exports: $204 billion (including reexports; f.o.b., 2000 est.)
Exports – commodities: clothing, textiles, footwear, electrical appliances, watches and clocks, toys
Exports – partners: China 33%, United States 24%, Japan 5%, UK 4%, Germany, Singapore (1999)
Imports: $215 billion (f.o.b., 2000)
Imports – commodities: foodstuffs, transport equipment, raw materials, semi-manufactures, petroleum; a large share is reexported
Imports – partners: China 44%, Japan 12%, United States 7%, Taiwan 7%, South Korea, Singapore (1999)
Debt – external: $48.1 billion (1999)
Currency: Hong Kong dollar (HKD)

Map of Hong Kong