Hong Kong`s Free Economy: At the Crossroads?

During the first Opium War fought between China and Britain (1839-42), Hong Kong ceded to the British Empire. Over time, the British government established a free-enterprise economy on the island and this later turned into a major trading center in Asia. In 1984, the Chinese and British governments signed a ‘Joint Declaration’ on the transfer of Hong Kong's sovereignty to China with effect from July 1, 1997. A Special Administrative Region (SAR) was established in 1997 under the “One Country, Two Systems” principle. The Basic Law allowed Hong Kong SAR to enjoy a high degree of autonomy and an independent executive, legislature, and judiciary. It was allowed to forge external relations in certain areas – including trade, communications, tourism, and culture using the name “Hong Kong, China,” while Beijing maintained control over the region’s foreign and defence policy. ..