CRS-5
I. BACKGROUND
Hong Kong has a 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., con-
sisting 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). However, Beijing regards Hong Kong as part of its
a view it announced territory, illegally under British administration
formally to the United Nations in 1972.
MENORCA
Hong Kong began its rise to prominence as a preeminent commercial cen-
ter 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 entrepot trade between China and the West as a result of the embargo
during the Korean War led to the development of textile and other light
manufacturing industies in Hong Kong.
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 including such vital supplies as water, foodstuffs and fuel.
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 China have been