Hong Kong - geography.

« IV ECONOMY Hong Kong’s position as one of the world’s most important economic centers is based on several factors.

It is located midway between Japan and Singapore, and it liesastride the main shipping and air routes of the western Pacific.

It also has long served as a major port of entry and trade for China, which uses Hong Kong as a primary linkto the world economy.

Furthermore, Hong Kong has a favorable atmosphere for business and trade.

Despite the uncertainty associated with its return to China, which has aCommunist government, Hong Kong continues to thrive economically and attract new migrants.

Hong Kong’s economy has always been based upon commerce, trade, andshipping, and today it vies with Singapore as the world’s largest container port.

Industry and tourism are also important, and agriculture continues to provide a significantshare of the territory’s food and flower supplies, although Hong Kong must import the majority of its food. Farming is a declining sector, because of the shortage of suitable farmland.

There are now less than 2,000 hectares (5,000 acres) under cultivation for vegetables andflowers, although these produce about one-quarter of the fresh vegetables consumed.

Increasingly, farmers are growing premium food and flower varieties, which fetchhigher market prices than the traditional rice crop.

Pig farming is also important.

Hong Kong’s fishing fleet is significant and contributes about two-thirds of the live andfresh marine fish consumed each year. Manufacturing developed rapidly in the 1950s and grew to become the most important economic sector in the early 1980s, when manufacturing employment reached nearly905,000.

Hong Kong was a leading producer of textiles, plastics, rattan furniture, watches, and clocks.

Manufacturing thereafter declined rapidly, however, as the economyof Hong Kong underwent major structural change.

Manufacturers began shifting the location of their production facilities to neighboring Guangdong Province and otherlocations in China, where labor and land costs were much lower.

By the early 1990s industrial employment had declined to less than 575,000, and by 2005 it was about185,000.

However, the relocation of labor-intensive manufacturing to mainland China has been partially offset by the fact that many of the relocated businesses havecontinued to conduct export operations in Hong Kong.

In addition, Hong Kong now manufactures goods that require a more highly educated and skilled labor force, such aselectrical and electronic products.

Most importantly, the services sector has experienced rapid growth, especially in finance, insurance, real estate, and business services,giving Hong Kong the sophistication of a metropolitan economy. Hong Kong is among the leading trading centers in the world, and shipping and trade continue to be important aspects of its economy.

The market is generally open andfavorable to trade, and Hong Kong has been successful at balancing its imports and exports.

Many of its exports are actually re-exports, products that are manufactured inother parts of China or other countries but distributed through Hong Kong.

These products include clothing, textiles, telecommunications and recording equipment, electricalmachinery and appliances, and footwear.

Imports consist largely of consumer goods, raw materials, transportation equipment, and foodstuffs.

Extensive trade occurs withother regions of China.

In addition, Hong Kong’s leading international trading partners are the United States and Japan. The unit of currency is the Hong Kong dollar (7.80 Hong Kong dollars equal U.S.$1; 2006 ).

The Hong Kong Monetary Authority performs the functions of a central bank and authorizes three commercial banks—the Bank of China, HSBC (formerly the Hongkong and Shanghai Banking Corporation), and the Standard Chartered Bank—to issueHong Kong dollars.

The terms of the Sino-British Joint Declaration of 1984 allow Hong Kong to continue issuing its own currency until the year 2047. Tourism is one of Hong Kong’s most important service activities and it is the third largest source of foreign exchange earnings.

Tourism dollars injected more than $7 billioninto the Hong Kong economy each year of the early 1990s, when nearly 9 million tourists visited annually.

In 2006, 15.8 million tourists visited Hong Kong.

Most visitorscame from Taiwan, Japan, Singapore, Malaysia, and other locations in East and Southeast Asia.

Many European and North American tourists also visited. In addition to its excellent deepwater port and extensive maritime connections, Hong Kong has one of Asia’s main airports, the Hong Kong International Airport.

Located onthe islet of Chek Lap Kok off Lantau Island, the airport opened in 1998, replacing the old Kai Tak International Airport.

There is passenger and freight rail service toGuangzhou. Hong Kong has an extensive network of roads in the New Territories, in Kowloon, and on Hong Kong Island.

This network is supplemented by the Mass Transit Railway(MTR), which connects Hong Kong Island, Kowloon, and the New Territories.

A 33-km (21-mi) electric trolley line operates on Hong Kong Island, and ferries shuttle betweenthe mainland, Hong Kong Island, and all other major outlying islands. V GOVERNMENT Prior to July 1, 1997, Hong Kong was a British dependent territory.

A British-appointed governor, representing the British crown, headed the Hong Kong government andexercised authority over civil and military matters.

An Executive Council advised the governor on all important matters, and a 60-member Legislative Council (known asLegco) enacted laws and oversaw the budget.

With the territory’s transfer to China in 1997, leadership passed from the last British governor, Chris Patten, to a Chinese chiefexecutive, Tung Chee-hwa. The terms of the transfer to China were based on a “one country, two systems” concept, under which Hong Kong is allowed a high degree of autonomy, charting its owncourse with the exception of foreign affairs and defense.

The Hong Kong SAR is governed under a “mini-constitution” called the Basic Law, which guarantees that thecapitalist system and way of life in Hong Kong will remain unchanged for 50 years after the transfer to China.

Under the Basic Law, a chief executive, appointed to amaximum of two five-year terms, heads the government of the Hong Kong SAR.

An election committee, whose members are appointed by China, selects the chiefexecutive.

The chief executive presides over the Executive Council, whose members assist the chief executive in policy-making decisions. The lawmaking body of the Hong Kong SAR is the Legislative Council, which is comprised of 60 members who serve four-year terms.

In the 2004 legislative elections 30seats went to candidates who were directly elected by a system of proportional representation (in which seats are awarded to a political party in proportion to the number ofpopular votes it receives), and 30 seats were determined by elections within “functional constituencies” comprising professional and special interest groups.

The judiciary ofthe Hong Kong SAR is independent, and laws are based on English common law and the rules of equity.

Judges are appointed by the chief executive. VI HISTORY The first permanent settlement in what is today Hong Kong probably occurred about 2,000 years ago during the Han dynasty (206 BC-AD 220).

Little growth took place until the 19th century, owing to China’s imperial policy of inward development, with a focus away from developing the resources of coastal areas.

Also, despite Hong Kong’sproximity to the port city of Guangzhou, all foreign trade with China was controlled through a small Chinese merchant guild in Guangzhou known as the Co-hong, andcontact with foreigners was highly restricted. The British, who wished to expand their trading opportunities along China’s coast, became interested in Hong Kong in the early 19th century.

They also desired a location toserve as a naval resupply point, similar to the role Singapore was playing at the southern tip of the Malay Peninsula.

The trade of opium, a highly profitable product forBritish merchants and eventually an illegal import into China, led to the Opium Wars and Britain’s acquisition of Hong Kong.

In 1839 the Chinese Special Commissionerimprisoned some British merchants in Guangzhou and confiscated opium warehouses.

The merchants were released, but the British foreign secretary, Lord Palmerston,dispatched naval forces and war ensued.

The British had a superior naval force and won easily, occupying Hong Kong Island in 1841. One year later, China and Britain signed the Treaty of Nanjing (Nanking) which ceded Hong Kong Island and adjacent small islands in perpetuity to Britain.

Treaty disputesand other incidents led to the Second Opium War in 1856, also won by Britain.

The conflict ended with the ratification of the Treaty of Tianjin in 1860.

Among otherprovisions, this treaty ceded 10 sq km (4 sq mi) of the Kowloon Peninsula to Britain, thereby allowing the British to establish firm control over the excellent natural harborbetween Hong Kong Island and the Kowloon Peninsula.

In 1898 China leased the New Territories to Britain for 99 years, adding more than 900 sq km (350 sq mi) of land. »