On the night of June 30, , Sign up now to learn about This Day in History straight from your inbox. One of the largest military conflicts in North American history begins on July 1, , when Union and Confederate forces collide at Gettysburg, Pennsylvania. The epic battle lasted three days and resulted in a retreat to Virginia by Robert E.
Ford began its development of the Thunderbird in the years following World War II, during which American servicemen had the opportunity to observe sleek The First Battle of El Alamein begins.
In June, the British had succeeded in driving Rommel into a defensive position in Libya. But Rommel repelled repeated air and Live TV.
This Day In History. History Vault. Just as Britain neglected electoral reform until the last moment, it did not extend its generally good record on respect for civil liberties in the territory to include Hong Kong in the international regime for the protection of human rights. Only after the Tiananmen Square massacre was a Bill of Rights enacted in China did agree to an independent-minded judge becoming the new Chief Justice. China will probably send contradictory signals about its intentions on political and legal issues in Hong Kong, because of uncertainty about how to deal with a unique arrangement and because of divisions between reformers and conservatives within the Party and the Army.
A lot will depend upon the political adroitness of the Chief Executive in balancing the demands of different factions in Beijing with those of interest groups in Hong Kong. Australia has a keen interest in the future of Hong Kong because the territory is Australia's tenth largest merchandise trading partner and important for investment and trade in services.
There is also a large movement of people between Hong Kong and Australia because of growing migration in recent years especially professional and business people , including people who maintain business links in the territory, as well as Hong Kong students in Australia and a large two-way flow of tourists.
Australia may face the problem of people from Hong Kong overstaying tourist visas after The controversy about China's installation of an unelected Provisional Legislative Council, and the different position on the issue taken by Australia, Britain and the US, highlights the fact that political problems in Hong Kong after will not only potentially be a cause of friction between Australia and China but may also have implications for Australia's other relationships in the Asia-Pacific region, particularly with the US.
There is a starkly contradictory character to opinions about the future of Hong Kong after , with most people confident about economic prospects but few sanguine about the chances of preserving existing standards on the rule of law and political freedoms. The best prospects for Hong Kong lie in the fact that continued prosperity in the territory is in China's interest and that the Chinese leadership is keen to use Hong Kong as an example or 'trial run' in its efforts towards reunification with Taiwan and in its general foreign relations.
It is critical that Beijing acts in the realisation that the distinct character of Hong Kong means that it must be governed differently from the rest of China or a mass exodus of skilled people and capital will undermine the viability of the territory.
The territory is being returned to China on that date because the British lease on the so-called New Territories, which make up the majority of the land area of Hong Kong, expires after ninety-nine years. Although sovereignty over Hong Kong Island and Kowloon was ceded to the British Crown in perpetuity in and respectively, the British government decided that continued possession of these small territories was not an option on either political or economic grounds and the entire territory of Hong Kong will be handed over to Beijing on 1 July.
The transfer of Hong Kong from British to Chinese sovereignty has raised questions about the capacity of the territory to maintain the economic performance which has seen it develop from a backwater in the s to a wealthy industrialised economy today. Hong Kong has played a key role as a bridge between China and the outside world and an important part in promoting the rapid development of the Chinese economy since the reforms begun in The question often posed, however, is whether integration into China will undermine the very features, such as the rule of law and a relatively open political system, which have made the territory attractive as a destination for investment.
The handover has also aroused fears within Hong Kong and internationally that integration into a China ruled by an authoritarian but increasingly uncertain post-Maoist regime will bring to an end the political freedoms and respect for the rule of law and human rights which the territory has enjoyed under British rule.
A deteriorating political and human rights situation in Hong Kong after could lead to an outflow of refugees and friction between China and other countries in the Asia-Pacific region, especially the US. Such issues are of major importance for Australia because Hong Kong is now a major trade and investment partner and because political problems in the territory would inevitably affect Australia's sensitive relationship with China.
This paper outlines the background to the issues involved in the handover of Hong Kong to China and why it is such an emotive national issue for China. It discusses the importance of Hong Kong in China's economic transformation and the likelihood that the territory will continue to prosper after It also examines the controversy between Britain and China over the reform of Hong Kong's Legislature and the prospects for the protection of civil liberties and human rights after It details the importance of Hong Kong for Australia and the implications of any deterioration in the political situation in the territory for Australia and the region.
Hong Kong has played a central role in the history of China's relations with the outside world and two particular aspects of that history are crucial for an understanding of the issues surrounding the transfer of the territory to China. The first is that the colony was established as a free trading port, chosen for its deep water harbour and designed not for territorial conquest but to open up trade with the previously closed Chinese hinterland. The second is that Hong Kong was ceded to Britain by force, against the wishes of the then Chinese Empire.
The character of Hong Kong as a free trade port was the impetus for British activities in the territory from the very beginning and defined its later roles as an entrepot port, manufacturing site and financial centre.
Before the s, British merchants traded in textiles and tea under strict control by Chinese imperial authorities. But since the Chinese Government's ban on opium-smoking made opium a very profitable trading commodity, there was bound to be conflict when the Chinese attempted to suppress its import.
Chinese objections were overcome by the British Navy in the 'Opium Wars' of the s and s when the British established Hong Kong as a permanent presence on the Chinese coast. Hong Kong remained a significant trading port for British and other foreign interests well into the twentieth century, but by the s and s was overtaken in importance by Shanghai. The Chinese Revolution of confronted Hong Kong with a potential crisis, but when the new Communist government decided, on strategic grounds, not to take back what they regarded as rightfully part of China, the territory underwent a new surge of growth.
An influx of wealthy Chinese refugees, especially from Shanghai, provided the capital and expertise for new investment in manufacturing industry. This development was based on exploitation of the continuing stream of cheap Chinese labour and was encouraged by the permissive policies of the British administration, which maintained the free port tradition and imposed no tariffs on the import or export of goods.
Hong Kong also became the principal gateway through which Communist China conducted its limited financial and trade relations with the outside world. When China began liberalising its economy after , Hong Kong as a free entry point for trade and finance became even more important to China, providing a source of investment capital, technology and marketing skills to help fuel China's rapid economic development and growing foreign trade.
In the s, Hong Kong has been the source of between 60 and 80 per cent of total direct foreign investment in China. The treaties on which British rule was based were, in China's eyes, 'unequal' treaties which had no basis in law or justice. For diplomatic and commercial reasons, the Communist Government accepted the reality of the British occupation of the territory, but always looked upon Hong Kong as a temporarily separated part of China which would be returned to the motherland at such time as the Chinese people decided to take it back.
The abiding sense of historical injustice which is part of the official Chinese position on Hong Kong helps explain the continuing disagreement and misunderstanding which has marked Sino-British negotiations over the territory in recent years. Many Chinese officials have long distrusted British intentions, in particular harbouring fears that the British would leave Hong Kong stripped of its wealth on their departure or that they were using the territory to subvert the People's Republic and its values.
These undercurrents became especially evident when, in , the last British Governor of Hong Kong, Chris Patten, began reforms to introduce a degree of popular representation into the colony's governmental institutions. To the Chinese authorities these changes were, at best, a breach of previous agreements between the two sides to allow a smooth transition to Chinese rule or, at worst, an attempt to provide subversive elements with an entry point into post Chinese politics.
The Chinese government's determination not to allow the reforms to stand after are a reflection of the fact that it feels no obligation to respect any unacceptable political arrangements established by illegitimate foreign occupiers of what was always rightfully Chinese soil. The legacy of Hong Kong's history as a free port established by the British against China's will is thus at the heart of the issues which surround transfer of the territory to Chinese sovereignty today.
Hong Kong was able to survive as a viable entity separate from China without financial support from Britain because its people successfully capitalised upon the needs of the People's Republic for a gateway to the outside world and as a source of capital and expertise. Notwithstanding this role, the affront to Chinese sovereignty implicit in Hong Kong's existence has meant that the political issues involved in the transfer have been difficult to resolve.
Hong Kong until the s was something of an economic backwater, but has since grown into a major manufacturing, trade and services centre and was one of the first four 'newly industrialising countries' or 'Asian tigers' 3 which set the standards to which most other Asian developing countries now aspire.
In the last five years annual economic growth in Hong Kong has been around 5 to 6 per cent. For many years there was concern in Hong Kong and amongst international investors that China, with its languishing command economy, was casting envious eyes on Hong Kong's continuing economic success. The fear was that when Beijing assumed control, its policies would destroy the very features which made the territory so attractive for investment-that it would kill the goose that laid the golden egg.
As July drew closer, however, anxieties about the economic effects of the Chinese takeover diminished. Just as Hong Kong survived the formation of the People's Republic by becoming its gateway to the world, so the territory has become even more important to China since the economic reforms instituted by Deng Xiaoping from From the early s Hong Kong manufacturers began to take advantage of China's new openness to establish factories across the border in Guangdong province, making use of China's cheap labour and land.
For their part, the Chinese authorities established four Special Economic Zones which provided concessional tax and regulatory regimes aimed at attracting capital, technology and expertise, particularly from Hong Kong, Macao, Taiwan and other 'overseas Chinese' communities. Hong Kong quickly became the largest source of direct foreign investment in China and has continued to play such a role. From it became China's largest trading partner and was only overtaken by Japan in These developments have in the process radically changed the economic structure and role of Hong Kong.
While manufacturing was the mainstay of the Hong Kong economy during the s and s, since the s and the transfer of production to China, services have become the most important sector, accounting for over 70 per cent of GDP and employment. The territory provides a wide range of other services to China as it continues to open to the world economy. As a leading commentator, Michael Yahuda, expressed it:. Thus Hong Kong has been effectively integrated into the economy of China, especially southern China, supplying services crucial for the mainland's transformation from an inward-looking command economy to a major player on the world market.
Given the commitment by the post-Deng Xiaoping government to continuing economic reform and the further integration of China into the world economy, it is highly unlikely that Beijing would take any policy actions which it knew would jeopardise the robust economy of Hong Kong. From the time when the issue of Hong Kong's future status was first raised during discussions with Britain in the late s, the Chinese government has affirmed that it would follow the principle of 'one country, two systems', that is that Hong Kong under Chinese sovereignty would maintain a separate identity, a market-oriented economic system and its distinct 'way of life'.
The preservation of the existing economic structure of Hong Kong is important for China because of the contribution the territory makes to China's GDP and because it provides the knowledge and institutions necessary to compete in the world market that China currently lacks. But in addition to the direct economic significance of Hong Kong, it is vitally important to Beijing that integration of the territory is successful because the whole exercise is being closely watched as a 'trial run' for the much more substantial challenge of an eventual reunification with Taiwan.
The 'one country, two systems' idea was originally developed as a solution to the Taiwan question and any major economic problems for Hong Kong would hardly make unity with the mainland an attractive prospect for the people of Taiwan. Hong Kong will also benefit from what appears to be an improving capacity on the part of economic policy-makers in Beijing to control the cycles of the Chinese economy.
China's economy since the s has been characterised by huge boom-bust cycles - flurried investment leading to overheating, inflation and bottlenecks, provoking the government to overly-strong corrective measures which induced slumps and excess capacity, leading in turn to expansionary measures which fuelled a further unsustainable boom. In response to the overheating of , however, the Chinese government introduced reforms to monetary policy and brought the economy to a 'soft landing' without adversely affecting growth.
Inflation, which peaked at 24 per cent in mid, is expected to be less than 6 per cent in , but strong growth rates of around 8 per cent are forecast for the next three years. While the Chinese authorities' intentions appear to be to cause as little disruption to the economic life of Hong Kong as possible, some commentators remain concerned that the closed and often arbitrary culture of decision-making in China will inevitably undermine the relatively open, legally-based system in Hong Kong and that this will have an adverse effect on the territory's economy.
In China, in the absence of a clear rule of law, the wheels of economic life are greased by guanxi , political and family connections , increasingly another name for corruption and cronyism as getting rich has become the dominant credo in post-Maoist China. There are signs, however, that with the approach of July the culture of guanxi and corruption is already becoming a feature of Hong Kong. The Independent Commission Against Corruption ICAC , established by the Hong Kong administration in , estimated that the cost of 'gifts' and other payments to facilitate business with the mainland added from 3 to 5 per cent to operating costs.
One Hong Kong lawyer expressed his concern that any deterioration in the legal system would inevitably have adverse effects on business. He argued that if individuals or firms were unable to contest government actions in the courts they would turn to well-connected individuals who could, giving 'enormous employment to Mr. Fix-its' but undermining free and open competition. The critical issues which will confront Hong Kong after are therefore unlikely to be strictly economic questions but will take a political, legal and constitutional form.
We have seen that the special nature of Hong Kong as a free port on the edge of a command economy allowed the territory to carve itself a niche role as China's gateway to the world. Since the reforms begun in , Hong Kong's continued importance to the Chinese economy has ensured that its free market economy will be left intact after China agreed to govern Hong Kong under the principle of "one country, two systems", where the city would enjoy "a high degree of autonomy, except in foreign and defence affairs" for the next 50 years.
Hong Kong became a Special Administrative Region. This means it has:. The territory has its own mini-constitution to enshrine these special rights.
Called the Basic Law, it states that "the ultimate aim" is to elect the territory's leader, the chief executive, "by universal suffrage" and "in accordance with democratic procedures".
The leader is the chief executive, elected by a 1,member election committee. A majority of the members of this committee are viewed as pro-Beijing. The parliament is the Legislative Council LegCo. It is made up half of directly elected representatives and half by representatives chosen by professional or special interest groups. Political activists argue that the election process gives Beijing the ability to screen out any candidates it disapproves of.
Pro-democracy activists have been campaigning for years for Hong Kong people to have the right to elect their own leader. In , Beijing said it would allow direct election of the chief executive, but only from a list of pre-approved candidates. That lead to mass protests from people who wanted full direct democracy. The protests shut down central parts of the city for weeks. The move was later reversed. There are also a lot of people in Hong Kong who are concerned that China is increasingly meddling in Hong Kong politics in other ways, undermining more politically liberal traditions.
The anniversary of the handover is usually also marked by large demonstrations from both camps of the political divide.
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