Background Notes: Hong Kong, October 1998
Released by the Bureau of East Asian and Pacific Affairs
U.S. Department of State

Official Name:  Hong Kong Special Administrative Region

PROFILE

Geography

Area: 1,092 sq. km.; Hong Kong comprises Hong Kong Island, 
Kowloon, the New Territories and numerous small islands.
Terrain:  Hilly to mountainous with steep slopes and natural 
harbor.
Climate:  Tropical monsoon; cool and humid in winter, hot and 
rainy from spring through summer, warm and sunny in fall.

People

Population: 6.7 million (mid-1998).
Population growth rate: 3%.
Ethnic groups: Chinese -- 95%, other -- 5%.
Religions: Eclectic mixture of local religions -- 90%, Christian 
-- 10%.
Languages:  Cantonese (a dialect of Chinese) and English are 
official.
Literacy: 92% (96% male, 88% female).
Health: Infant mortality rate -- 4/1,000 (1997).  Life expectancy 
-- 79.1 years (overall); 76 (1998) years for males, 82 (1998) 
years for females.
Work force (1998): 3.298 million.  Merchandising, restaurants, 
and hotels -- 43.8%; services -- 14.1%; manufacturing -- 12.5%; 
finance, insurance, real estate -- 17.6%; transport and 
communications -- 7.7%; construction -- 3.9%; other -- 0.4%.

Government

Type:  Special Administrative Region (SAR) of China, with its own 
constitution (the Basic Law).
Branches: Executive -- Executive Council, serving in an advisory 
role for the Chief Executive.  Legislative -- Legislative Council 
elected in May, 1998. Judicial -- Court of Final Appeal.
Subdivisions:  Hong Kong, Kowloon,  New Territories.
Suffrage: Universal at 18 years of age for permanent residents 
living in Hong Kong for the past 7 years.

Economy

GDP (1997):  $172 billion.
GDP real growth rate (1998 est.): -4% (government preliminary 
estimate).
Per capita income (1998 est.):  $26,302.
Natural resources:  Outstanding deepwater harbor, feldspar.
Agriculture:  Products -- vegetables, poultry.
Industry:  Types -- textiles, clothing, tourism, electronics, 
plastics, toys, watches, clocks.
Trade (1997):  Exports -- $188 billion: clothing, electronics, 
textiles, watches and clocks, office machinery.  Main partners -- 
China, U.S., Japan, Germany, United Kingdom, Singapore.  Imports 
-- $209 billion: consumer goods, raw materials and semi-
manufactures, capital goods, foodstuffs, fuels. Main partners -- 
China, Japan, Taiwan, U.S., Singapore, South Korea.

PEOPLE

Hong Kong's population has increased steadily over the past 
decade, reaching approximately 6.7 million by 1998.  Hong Kong is 
one of the most densely populated areas in the world, with an 
overall density of approximately 6,100 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 over 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.  Pre-school 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.  Over 90% of children complete 
upper secondary education or equivalent vocational education.

HISTORY

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 Song 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.  Despite Chinese laws 
prohibiting opium since 1799, the British pursued and monopolized 
its trade until 1834.  Concerned about the rapid increase of 
opium in China, the Qing Government sought to eradicate the drug 
trade.  When Chinese officials seized and destroyed large 
quantities of opium, the British sent forces in 1840 to support 
demands for a commercial treaty or cession of an island for the 
safety of British nationals; this sparked the First Opium War.  
China lost the war; subsequently, Britain and other Western 
powers, including the United States, forcibly occupied 
"concessions" and gained special commercial privileges.  Hong 
Kong was ceded to Britain in 1842 under the Treaty of Nanking.

Disputes over former treaties and the Chinese boarding of the 
British ship Arrow started the Second Opium War (also known as 
the Lorcha Arrow War), which lasted from 1856 to 1858.  The 
Convention of Beijing, signed in 1860, formally ended the 
hostilities and granted the British a perpetual lease on the 
Kowloon Peninsula.  The United Kingdom was concerned that Hong 
Kong could not be defended unless surrounding areas were also 
under British control; in 1898, it executed a 99-year lease of 
the New Territories, 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 in 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.

GOVERNMENT

The Hong Kong Special Administrative Region (SAR) is headed by 
Chief Executive Tung Chee Hwa.  Mr. Tung assumed office on July 
1, 1997 following his election by a 400-member Selection 
Committee comprised of prominent Hong Kong residents. In May 
1998, Hong Kong voters elected 60 members of the SAR's first 
Legislative Council.  The Basic Law, Hong Kong's "mini-
Constitution," states that the first Legislative Council shall 
consist of 20 directly elected members, 30 members elected by 
functional (occupational) constituencies, and 10 elected by an 
electoral college.  The May 1998 elections were seen as free, 
open and widely contested, despite discontent among mainly pro-
democracy politicians over the Government's "rollback" of the 
franchise in some functional constituencies and limitation on the 
number of directly elected seats.  The Civil Service maintains 
its quality and neutrality, operating without discernible 
direction from Beijing.

Principal Government Officials

Chief Executive -- Tung Chee Hwa
Chief Secretary for Administration -- Anson Chan
Financial Secretary -- Donald Tsang
Secretary for Justice -- Elsie Leung

POLITICAL CONDITIONS

On July 1, 1997, China resumed the exercise of sovereignty over 
Hong Kong, ending more than 150 years of British colonial 
control.  The government of Chief Executive Tung Chee Hwa was 
also installed on that date.  Thus far, the transition to Chinese 
sovereignty has been smooth.  Hong Kong remains a free, open 
society with an independent judiciary.

The Sino-British Joint Declaration, signed in December 1984 after 
2 years of negotiations, provided the framework for this peaceful 
transfer of sovereignty.  The agreement stipulated that Hong Kong 
would become a Special Administrative Region of the People's 
Republic of China on July 1, 1997 but would retain a high degree 
of autonomy in all matters except foreign and defense affairs.  
The Joint Declaration further stated that for 50 years after 
reversion Hong Kong would retain its political, economic, and 
judicial systems, and could continue participating in 
international agreements and organizations under the name, "Hong 
Kong, China."

The Basic Law, which established Hong Kong's post-reversion 
political and legal structure and serves as a mini-constitution 
for the Hong Kong Special Administrative Region, was promulgated 
by the Chinese National People's Congress in April 1990 after 5 
years of deliberation.

ECONOMY

The ongoing region-wide Asian financial crisis, which began in 
1997, has created uncertainty and instability in Hong Kong's 
economy.  Hong Kong is in recession, with 1998 GDP expected to 
decline 4% and both stock market and property prices off 50%.  
Private consumption, after increasing by 6.7% in 1997, is 
expected to decline by 4.5% in 1998.  Unemployment is up to 5% 
from 2.2% in 1997.  In August 1998, the government intervened in 
the stock, futures, and currency markets to fend off 
"manipulators," terming the move a one-time divergence from its 
usual adherence to non-interventionist, market-oriented policies.  
The banking sector remains solid and the government is committed 
to the U.S./Hong Kong dollar link.

Hong Kong has little arable land and virtually no natural 
resources, including water for agriculture.  Agriculturally, it 
is less than 20% self-sufficient, with shortages of rice and 
wheat.  However, its magnificent harbor has facilitated rapid 
development of foreign trade.  Hong Kong's principal trading 
partners include China, the United States, Japan, Taiwan, 
Germany, Singapore, and South Korea.  With its modern 
communications, transportation, and banking facilities, as well 
as extensive expertise in trade and investment with China, Hong 
Kong has joined the front ranks of East Asia's newly 
industrialized economies.  In 1997, Hong Kong's gross domestic 
product (GDP) was $172 billion.

After a period of very rapid growth between 1986-88, economic 
austerity and the Chinese Government's crackdown in Tiananmen 
Square in 1989 reduced Hong Kong's growth to 2.6% in 1989 and 
3.4% in 1990.  Growth rebounded to more than 5.1% in 1991 and to 
6.1% in 1993 and continued to grow steadily until the first 
quarter of 1998, when Hong Kong experienced negative growth for 
the first time since 1984, with declines in construction, retail 
sales and tourism.

Hong Kong has enjoyed economic growth in the past because of its 
strong manufacturing sector, but in recent years the service 
sector has surpassed it in importance.  The major components of 
Hong Kong's service trade are shipping, civil aviation, tourism, 
and various financial services.

FOREIGN RELATIONS

Hong Kong's foreign relations and defense are the responsibility 
of China.

China has granted Hong Kong considerable autonomy in economic and 
commercial relations.  Hong Kong continues to be an active, 
independent member of the World Trade Organization (WTO) and the 
Asia-Pacific Economic Cooperation (APEC) forum.

U.S.-HONG KONG RELATIONS

U.S. policy toward Hong Kong is grounded in a determination to 
help preserve Hong Kong's prosperity and way of life.  The United 
States encourages high-level visits to Hong Kong as evidence of 
close ties and the importance of Hong Kong to U.S. interests.

The United States has substantial economic and social ties with 
Hong Kong.  There are 1,100 U.S. firms (including over 400 
regional operations) and 50,000 American residents in Hong Kong.  
According to U.S. Government statistics, U.S. exports to Hong 
Kong totaled U.S. $15.1 billion in 1997, and two-way trade 
totaled U.S. $25.3 billion, making Hong Kong the United States' 
15th-largest trading partner.  U.S. direct investment in Hong 
Kong at the end of 1997 totaled approximately U.S. $19 billion, 
making the United States one of Hong Kong's largest investors, 
along with the U.K., China and Japan.

The Hong Kong Government maintains three Economic and Trade 
Offices in the United States.  Addresses and telephone numbers 
for these offices are listed below:

1520 18th Street NW
Washington, DC  20036
Tel: (202) 331-8947

680 Fifth Avenue, 22 F
New York, NY  10019
Tel: (212) 265-8888

222 Kearny St., Suite 402
San Francisco, CA  94108
Tel: (415) 397-2215

Principal U.S. Officials

Consul General -- Richard A. Boucher
Deputy Principal Officer -- John Medeiros

The U.S. Consulate General is located at 26 Garden Road, Hong 
Kong.  Tel: (852) 2523-9011.  FAX:  (852) 2845-1598 (general): 
(852) 2845-4845 (consular); (852) 2845-9800 (commercial).

WEB SITES

The following three sites are not U.S. Government web sites.

Hong Kong homepage: 
http://www.info.gov.hk

Sintercom Hong Kong homepage: 
http://www.sintercom.org/makan/award/hk.html

China Internet Information Center homepage: 
http://www.chinanews.org

TRAVEL AND BUSINESS INFORMATION

The U.S. Department of State's Consular Information Program 
provides Travel Warnings and Consular Information Sheets. Travel 
Warnings are issued when the State Department recommends that 
Americans avoid travel to a certain country. Consular Information 
Sheets exist for all countries and include information on 
immigration practices, currency regulations, health conditions, 
areas of instability, crime and security, political disturbances, 
and the addresses of the U.S. posts in the country. Public 
Announcements are issued as a means to disseminate information 
quickly about terrorist threats and other relatively short-term 
conditions overseas which pose significant risks to the security 
of American travelers. Free copies of this information are 
available by calling the Bureau of Consular Affairs at 202-647-
5225 or via the fax-on-demand system: 202-647-3000. Travel 
Warnings and Consular Information Sheets also are available on 
the Consular Affairs Internet home page: http://travel.state.gov 
and the Consular Affairs Bulletin Board (CABB). To access CABB, 
dial the modem number: 301-946-4400 (it will accommodate up to 
33,600 bps), set terminal communications program to N-8-1(no 
parity, 8 bits, 1 stop bit); and terminal emulation to VT100. The 
login is travel and the password is info. (Note: Lower case is 
required). The CABB also carries international security 
information from the Overseas Security Advisory Council and 
Department's Bureau of Diplomatic Security. Consular Affairs 
Trips for Travelers publication series, which contain information 
on obtaining passports and planning a safe trip abroad, can be 
purchased from the Superintendent of Documents, U.S. Government 
Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-7954; 
telephone: 202-512-1800; fax 202-512-2250.

Emergency information concerning Americans traveling abroad may 
be obtained from the Office of Overseas Citizens Services at 
(202) 647-5225. For after-hours emergencies, Sundays and 
holidays, call 202-647-4000.

Passport Services information can be obtained by calling the 24-
hour, 7-day a week automated system ($.35 per minute) or live 
operators 8 a.m. to 8 p.m. (EST) Monday-Friday ($1.05 per 
minute). The number is 1-900-225-5674 (TDD: 1-900-225-7778). 
Major credit card users (for a flat rate of $4.95) may call 1-
888-362-8668 (TDD: 1-888-498-3648).

Travelers can check the latest health information with the U.S. 
Centers for Disease Control and Prevention in Atlanta, Georgia. A 
hotline at (404) 332-4559 gives the most recent health 
advisories, immunization recommendations or requirements, and 
advice on food and drinking water safety for regions and 
countries. A booklet entitled Health Information for 
International Travel (HHS publication number CDC-95-8280) is 
available from the U.S. Government Printing Office, Washington, 
DC 20402, tel. (202) 512-1800.

Information on travel conditions, visa requirements, currency and 
customs regulations, legal holidays, and other items of interest 
to travelers also may be obtained before your departure from a 
country's embassy and/or consulates in the U.S.

U.S. citizens who are long-term visitors or traveling in 
dangerous areas are encouraged to register at the U.S. embassy or 
consulate upon arrival in a country (see "Principal U.S. 
Officials" listing in this publication). This may help family 
members contact you in case of an emergency.

Further Electronic Information

Department of State Foreign Affairs Network. Available on the 
Internet, DOSFAN provides timely, global access to official U.S. 
foreign policy information. Updated daily, DOSFAN includes 
Background Notes; Dispatch, the official magazine of U.S. foreign 
policy; daily press briefings; Country Commercial Guides; 
directories of key officers of foreign service posts; etc. 
DOSFAN's World Wide Web site is at http://www.state.gov.

U.S. Foreign Affairs on CD-ROM (USFAC). Published on an annual 
basis by the U.S. Department of State, USFAC archives information 
on the Department of State Foreign Affairs Network, and includes 
an array of official foreign policy information from 1990 to the 
present. Contact the Superintendent of Documents, U.S. Government 
Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-7954. To 
order, call (202) 512-1800 or fax (202) 512-2250.

National Trade Data Bank (NTDB). Operated by the U.S. Department 
of Commerce, the NTDB contains a wealth of trade-related 
information. It is available on the Internet (www.stat-usa.gov) 
and on CD-ROM. Call the NTDB Help-Line at (202) 482-1986 for more 
information.

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