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History

areas. There are now 24 country parks and 22 special areas, which cover about 40 per cent of land in Hong Kong to conserve its varied habitats.

The end of the Vietnamese war in 1975 saw a fresh influx of refugees, this time from Vietnam. By the time the last refugee camp was closed in 2000, over 200,000 Vietnamese had made their way to Hong Kong. Of these, more than 143,000 were resettled overseas and some 72,000 repatriated to Vietnam.

Into the New Millennium

In the 1970s, the approaching expiry of the lease on the New Territories in 1997 caused uncertainties in Hong Kong, and in 1982 the British Prime Minister, Margaret Thatcher, visited China to discuss the city's future with Chinese leaders. That visit marked the start of two years of negotiations between the Chinese and British governments, culminating in the signing of the Sino-British Joint Declaration on the Question of Hong Kong on 19 December 1984. The Joint Declaration set out the basic policies of the People's Republic of China (PRC) regarding Hong Kong, including the PRC's decision to establish a Hong Kong Special Administrative Region (HKSAR).

On 1 July 1997, the HKSAR was established and the Basic Law of the HKSAR of the PRC, the HKSAR's constitutional document, took effect. The Basic Law prescribes the systems to be practised in the HKSAR and enshrines, in the form of law, the important principles of 'one country, two systems, 'Hong Kong people administering Hong Kong' and a high degree of autonomy. Reflecting those principles, the Basic Law provides that the socialist system and policies shall not be practised in the HKSAR, and that the previous capitalist system and way of life shall remain unchanged for 50 years.

The city's changes were not only political. Over the years, the manufacturing sector moved its focus from simple, labour-intensive products to sophisticated, high value-added products. Taking advantage of the abundant supply of land and labour in the Pearl River Delta, industrialists expanded their production bases across the boundary while retaining their headquarters in Hong Kong. This mode of operation has contributed to economic development in the region and facilitated the transformation of Hong Kong into an increasingly service-based economy, with domestic merchandise exports accounting for less than 2 per cent of total exports by 2012.

To keep pace with the development, the government improved and expanded the infrastructure. Hong Kong was transformed into a modern city with efficient road and rail links, and first-class port and airport facilities. New highways opened up previously remote areas, the railway networks were expanded and Hong Kong International Airport at Chek Lap Kok was opened in 1998.

Development of the economic base has let the government increase spending on education, social welfare, health and other needs, from $301.4 billion in 2010-11 to an estimated $731.1 billion in 2020-21.

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