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HONG KONG – more fully known as the Hong Kong SAR – wears a lot of hats: despite emerging competition from Shanghai, it remains one of the world’s largest financial hubs; its modern face hides a surprisingly traditional culture; and it’s also an experiment in governance with which the mainland authorities hope to win over a recalcitrant Taiwan. There’s an unrelenting striving for wealth and all its rewards here too, though Hong Kong’s famous addiction to money and brand names tends to mask the fact that most people work long hours and live in crowded, tiny apartments. On the other hand, the city is bursting with energy and the population of seven million is sophisticated and well informed compared to their mainland cousins, the result of a relatively free press. The urban panorama of sky-scrapered Hong Kong Island, seen across the harbour from Kowloon, is stunning, and you’ll find a wealth of undeveloped rural areas within easy commuter range of the hectic centre and its perennial, massive engineering projects.

Hong Kong comprises 1100 square kilometres of the south China coastline and a number of islands east of the Pearl River Delta. The principal urban area is spread along the north shore of Hong Kong Island, which offers not only traces of the old colony – from English place names to ancient, double-decker trams trundling along the shore – but also superb modern cityscapes of towering buildings teetering up impossible slopes, along with whole districts dedicated to selling traditional Chinese medicine and herbs. The south of the island offers several decent beaches, a huge amusement park, and even hiking opportunities.

Immediately north across Victoria Harbour from Hong Kong Island, the Kowloon Peninsula – and especially its tip, Tsim Sha Tsui – is the SAR’s principal tourist trap, boasting a glut of accommodation, and shops offering an incredible variety of goods (not necessarily at reasonable prices, though). North of Tsim Sha Tsui, Kowloon stretches away into the New Territories, a varied area of New Towns and older villages, secluded beaches and undeveloped country parks. In addition, the Outlying Islands – particularly Lamma and Lantau – are well worth a visit for their seafood restaurants and further rural contrasts to the hubbub of downtown Hong Kong.

Hong Kong has its own separate currency, the Hong Kong dollar, which is pegged at around $8 to the US dollar and so is currently worth a little less than the Chinese yuan. Yuan cannot officially be used in Hong Kong, though a few stores will take them. In this chapter, the symbol “$” refers to Hong Kong dollars throughout, unless stated.

Some history

While the Chinese justifiably argue that Hong Kong was always Chinese territory, the development of the city only began with the arrival of the British in Guangzhou in the eighteenth century. Having initially been rebuffed in their attempts to engage in profitable trade with China, the British found a valuable market for Indian opium; Chinese attempts to stop the trade precipitated the Opium Wars; and the ensuing Treaty of Nanking (1842) ceded a small, thinly populated offshore island – Hong Kong – to Britain. Following more gunboat diplomacy eighteen years later, the Treaty of Peking granted Britain the Kowloon Peninsula, too, and in 1898 Britain secured a 99-year lease on an additional one thousand square kilometres of land north of Kowloon, later known as the New Territories.

Originally a seedy merchants’ colony, by 1907 Hong Kong had a large enough manufacturing base to voluntarily drop the drug trade. Up until World War II, the city prospered as turmoils in mainland China drove money and refugees south into the apparently safe confines of the British colony. This confidence proved misplaced in 1941 when Japanese forces seized Hong Kong along with the rest of eastern China, though after Japan’s defeat in 1945, Britain swiftly reclaimed the colony, stifling putative attempts by the residents to garner some independence. As the mainland fell to the Communists in 1949, a new wave of refugees – many of the wealthier ones from Shanghai – swelled Hong Kong’s population threefold to 2.5 million, causing a housing crisis that set in motion themes still current in the SAR: land reclamation, the need for efficient infrastructure, and a tendency to save space by building upwards.

The early Communist era saw Hong Kong leading a precarious existence. Had China wished, it could have rendered the existence of Hong Kong unviable 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 never wholeheartedly pursued any of these options, even at the height of the Cultural Revolution, was an indication of the huge financial benefits that Hong Kong’s international trade links, direct investment and technology transfers brought – and still brings – to mainland China.

In the last twenty years of British rule, the spectre of 1997 loomed large. Negotiations on the future of the colony led in 1984 to the Sino-British Joint Declaration, paving the way for Britain to hand back sovereignty of the territory in return for Hong Kong maintaining its capitalist system for fifty years. However, it appeared to locals that Hong Kong’s lack of democratic institutions – 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 constitutional framework provided by the Basic Law of 1988, in theory, answered some of those fears, illustrating how the “One Country, Two Systems” policy would work. But the next year’s crackdown in Tian’anmen Square only seemed to confirm the most pessimistic views of what might happen following the handover, especially to members of Hong Kong’s embryonic democracy movement. When Chris Patten arrived in 1992 to become the last governor, he cynically broadened the voting franchise for the Legislative Council (Legco) from around 200,000 to some 2.7 million people, infuriating Beijing and ensuring that the road to the handover would be a rough ride.

Post-1997

After the build-up, however, the handover was an anticlimax. The British sailed away on HMS Britannia, Beijing carried out its threat to reduce the enfranchised population, and Tung Chee-hwa, a shipping billionaire, became the first chief executive of the Hong Kong SAR. But his highly unpopular tenure proved unequal to dealing with the Asian financial crisis, recession and soaring unemployment, avian flu outbreaks and finally SARS, a baffling virus that killed 299 people and shut down the tourist industry. Public dissatisfaction with Tung coalesced every June 4 (the anniversary of the Tian’anmen Square crackdown), when about half a million people turned out to demonstrate against him – and, by extension, Beijing’s hold over Hong Kong.

This was too much for the powers in Beijing, who wanted Hong Kong to showcase the “One Country, Two Systems” approach to Taiwan – which, now that former colonial territories have been reclaimed, remains the last hurdle to China being reunited under one government. Tung was forced to stand down in March 2005, replaced as chief executive by career civil servant Donald Tsang. Despite re-election in 2007, Tsang is seen by many Hong Kongers as a bureaucrat who ignores public concerns about welfare and urban redevelopment, while favouring the demolition of Hong Kong’s dwindling antique heritage to make way for ill-planned roads and ever-larger shopping malls.

Meanwhile, local politics seem more divided than ever along pro-Beijing and pro-democracy lines, with the latter continually pushing for universal suffrage – which Beijing has promised in part by 2017. Democratic factions have, in fact, polled over a third of the vote since the handover (in 2008 they won 23 of the 30 electable seats), meaning that they hold a power of veto over bills passed through Legco. But how all parties involved will pull together in the face of China’s rising power remains to be seen.

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