Hong Kong is known to international tourists and businessmen as the "Pearl of the Orient," a bastion of free enterprise in the Far East. One has only to glance at Victoria Harbor teeming with cargo ships (Hong Kong is one of the world's top three container ports), at Kai Tak Airport bustling with a thousand scheduled international flights per week, or at the gleaming skyscrapers of the commercial district to realize that this is a very special city in the context of Asia, indeed, a special city in the world.
Hong Kong's land area is small (about 400 square miles) and lacking in natural resources, so the economy is highly dependent upon export trade, including transshipments and re-exports. Consequently, Hong Kong is said to be the number three financial center in the world, with a humming banking sector where international currencies are actively traded, along with the Hong Kong dollar.
The state of the world's economy, then, affects Hong Kong greatly, so the general recovery from the recent world recession has been good for business in Hong Kong. The territory's government believes in keeping import and export licensing requirements and other regulations to a minimum and, in general, letting market forces control the flow of business. So far, the approach seems to have worked: Hong Kong is among the world's busiest trading nations.
But Hong Kong is not a simple, free economic zone. In recent years troubling questions concerning the colony's future have begun to arise. Indeed, the primary question in everyone's mind is: What happens when a communist country takes control over a very capitalist territory?
Britain's protective influence
Hong Kong has been able to flourish as a free port, an international financial center, and an important hub of world trade mainly because of its status as a British colony. However, most of the territory has actually been leased by Britain from China for 99 years under an 1898 treaty. The lease, then, runs out in 1997.
Britain's Prime Minister Margaret Thatcher first formally addressed the issue of Hong Kong's future with a trip to Peking to discuss the question of lease renewal with Chinese leaders. London's contention was that the best thing for Hong Kong, Britain, and China would be if Hong Kong were to continue to operate under the British flag.
The initial meeting was held behind closed doors. As Thatcher left the Great Hall of the People, located in Peking's historic Tian An Men Square, she stumbled and nearly fell on the front steps of the building. Some people in Hong Kong will remember the symbolic irony of that incident as 1997 approaches, because of what has happened since.
After the long, drawn-out, closed-door "1997 Talks" on the future of Hong Kong came to a close, Britain and China announced their agreement: Peking will resume sovereignty over all of Hong Kong (not just the leased sections) in 1997, but for at least 50 years thereafter, Hong Kong will operate as a "special administrative region."
Although a communist country is about to assume control over a capitalist colony, Britain and
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