BACKGROUND
CRS-3
Hong Kong has a current population of over 5 million, 98 percent
of whom are ethnic Chinese. The colony was acquired by Britain from
China in three stages: Hongkong Island (32 sq. mi.) by the Treaty of
Nanking in 1842; Kowloon Peninsula and Stonecutters' Island (3.75 sq.
mi.) by the First Convention of Peking in 1860; and the New Territories
(365 sq. mi., consisting of a mainland area adjoining Kowloon and 235
adjacent islands) by a 99-year lease under the Second Convention of
Peking in 1898. Consequently, most of the land area of Hongkong is
scheduled to revert to China in 1997, while Hongkong Island and Kowloon
Peninsula theroetically are British in perpetuity (see map). In fact,
Beijing regards Hong Kong as part of its territory under British adminis-
tration a view it announced formally to the United Nations in 1972
until the legal implications of the New Territories lease and other
matters are sorted out.
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Hong Kong began its rise to prominence as a major commercial center
in East Asia after Shanghai was taken by Communist forces in 1949 and
declined as an international economic market. The large number of people
from the PRC who sought refuge in Hong Kong and the subsequent cut off
of much entreport trade between China and the West as
embargo during the Korean War led to the development of raw materials
processing industry in Hong Kong as a means of alternative employment.
a result of the
At first Hong Kong purchased only limited amounts of food, building
material and fuel from the PRC for local consumption, but its growing
industries led to new needs, causing Hong Kong to become a major importer
of PRC products (in 1982 imports from China amounted to almost one fourth
of Hong Kong's total import bill of $23.5 billion.) Hong Kong exports to