For the most current version of this Note, see Background Notes A-Z.

PROFILE

OFFICIAL NAME:
Hong Kong Special Administrative Region

Geography
Area: 1,092 sq. km.; Hong Kong comprises Hong Kong Island, Kowloon, the New Territories, and numerous small islands.
Terrain: Hilly to mountainous, with steep slopes and natural harbor.
Climate: Tropical monsoon. Cool and humid in winter, hot and rainy from spring through summer, warm and sunny in fall.

People
Population (mid-2000): 6.782 million.
Population growth rate (2001): 1.3%.
Ethnic groups: Chinese 95%; other 5%.
Religions: Approximately 43% participate in some form of religious practice. Christian, about 8%.
Languages: Cantonese (a dialect of Chinese) and English are official. Literacy--92% (96% male, 88% female).
Health (2000): Infant mortality rate--5.83/1,000. Life expectancy--79.7 yrs. (overall); 76.9 yrs. males, 82.55 yrs. females. Work force (2000): 3.39 million. Wholesale, retail, and import/export trades and restaurants and hotels--31.5%; manufacturing--7.7%; finance, insurance, real estate, and business services--14.5%.

Government
Type: Special Administrative Region (SAR) of China, with its own mini-constitution (the Basic Law).
Branches: Executive--Executive Council, serving in an advisory role for the Chief Executive. Legislative--Legislative Council elected in September 2000. Judicial--Court of Final Appeal.
Subdivisions: Hong Kong, Kowloon, New Territories.
Suffrage: Universal at 18 years of age for permanent residents living in Hong Kong for the past 7 years.

Economy
GDP (2001): $162 billion.
GDP real growth rate (2001): -0.3%.
Per capita GDP (2001): $23,571.
Natural resources: Outstanding deepwater harbor, feldspar.
Industry: Types--textiles, clothing, tourism, electronics, plastics, toys, watches, clocks.
Trade: Exports--$193 billion: clothing, electronics, textiles, watches and clocks, office machinery. Imports--$205 billion: consumer goods, raw materials and semi-manufactures, capital goods, foodstuffs, fuels.

PEOPLE
Hong Kong's population has increased steadily over the past decade, reaching about 6.8 million by 1999. Hong Kong is one of the most densely populated areas in the world, with an overall density of some 6,300 people per square kilometer.

Cantonese, the official Chinese dialect, is spoken by most of the population. English, also an official language, is widely understood; it is spoken by more than one-third of the population. Every major religion is practiced in Hong Kong; ancestor worship is predominant due to the strong Confucian influence.

All children are required by law to be in full-time education between the ages of 6 and 15. Preschool education for most children begins at age 3. Primary school begins normally at the age of 6 and lasts for 6 years. At about age 12, children progress to a 3-year course of junior secondary education. Most stay on for a 2-year senior secondary course, while others join full-time vocational training. More than 90% of children complete upper secondary education or equivalent vocational education.

HISTORY
According to archaeological studies initiated in the 1920s, human activity on Hong Kong dates back over five millennia. Excavated Neolithic artifacts suggest an influence from northern Chinese Stone-Age cultures, including the Longshan. The territory was settled by Han Chinese during the seventh century, A.D., evidenced by the discovery of an ancient tomb at Lei Cheung Uk in Kowloon. The first major migration from northern China to Hong Kong occurred during the Ching Dynasty (960-1279). The British East India Company made the first successful sea venture to China in 1699, and Hong Kong's trade with British merchants developed rapidly soon after. After the Chinese defeat in the First Opium War (1839-42), Hong Kong was ceded to Britain in 1842 under the Treaty of Nanking. Britain was granted a perpetual lease on the Kowloon Peninsula under the 1860 Convention of Beijing, which formally ended hostilities in the Second Opium War (1856-58). The United Kingdom, concerned that Hong Kong could not be defended unless surrounding areas were also under British control, executed a 99-year lease of the New Territories in 1898, significantly expanding the size of the Hong Kong colony.

In the late 19th century and early 20th centuries, Hong Kong developed as a warehousing and distribution center for U.K. trade with southern China. After the end of World War II and the communist takeover of Mainland China in 1949, hundreds of thousands of people emigrated from China to Hong Kong. This helped Hong Kong become an economic success and a manufacturing, commercial, and tourism center. High life expectancy, literacy, per capita income, and other socioeconomic measures attest to Hong Kong's achievements over the last four decades.

GOVERNMENT
The Hong Kong Special Administrative Region (SAR) is headed by Chief Executive Tung Chee Hwa. Mr. Tung assumed office on July 1, 1997, following his selection by a 400-member committee appointed by Beijing. Legislative Council elections were held in May 1998 and again in September 2000. According to The Basic Law, Hong Kong's "Mini-constitution," the Legislative Council has 24 directly elected members--30 members elected by functional (occupational) constituencies and 6 elected by an Election Committee. The 1998 and 2000 elections were seen as free, open, and widely contested, despite discontent among mainly prodemocracy politicians that the functional constituency and Election Committee elections are essentially undemocratic because so few voters are eligible to vote. The Civil Service maintains its quality and neutrality, operating without discernible direction from Beijing.

Principal Government Officials
Chief Executive--Tung Chee Hwa
Chief Secretary for Administration--Donald Tsang
Financial Secretary--Antony Leung
Secretary for Justice--Elsie Leung
Secretary for Security--Regina Ip

POLITICAL CONDITIONS
On July 1, 1997, China resumed the exercise of sovereignty over Hong Kong, ending more than 150 years of British colonial control. Hong Kong is a Special Administrative Region of the People's Republic of China with a high degree of autonomy in all matters except foreign and defense affairs. According to the Sino-British Joint Declaration (1984) and the Basic Law--Hong Kong's mini-constitution--for 50 years after reversion Hong Kong will retain its political, economic, and judicial systems and unique way of life and continue to participate in international agreements and organizations under the name, "Hong Kong, China."

Although concerns about the continued independence of the judiciary arose when the Hong Kong Government sought interpretation of the Basic Law from the National People's Congress following a controversial Court of Final Appeal ruling (the Right of Abode case), Hong Kong's courts remain independent, and the rule of law is respected. Hong Kong remains a free and open society where human rights are generally respected.

ECONOMY
Hong Kong, as the world's tenth-largest trading entity and ninth-largest banking center, is one of the world's most open and dynamic economies. Per capita GDP approximates Great Britain's. Hong Kong's banking system is sound, and the government has massive reserves. The economy suffered its worst recession in 30 years during the Asian financial crisis. GDP recovered strongly in 2000, growing at 10.5%, but the collapse of consumer demand in the U.S. and Europe interrupted that recovery, dragging the economy into recession in 2001. Strong economic growth in China will buffer Hong Kong to some extent from the global economic slowdown, especially as compared to its rivals Singapore and Taiwan. However, increasing unemployment (now 5.3%) and uncertainty about the future have created a growing popular unease. In response to these economic difficulties, the government unveiled a series of modest stimulus measures in October 2001, including infrastructure expenditures, small tax cuts, and development funds for small and medium enterprises. Authorities generally resisted pressure for largescale government expenditures to stimulate the economy. The deficit for fiscal year 2001-02 will be considerably larger, primarily because of declining revenues caused by the economic downturn.

Over the long term Hong Kong enjoys a number of positive economic factors, including accumulated public and private wealth from decades of unprecedented growth, virtually no public debt, a strong legal system, and an able and rigorously enforced anti-corruption regime. The need for restructuring and redefinition--possibly as a high-tech, information center--as Hong Kong's advanced, high-cost, service-based economy continues to evolve, poses difficult challenges and choices for the government. Hong Kong is endeavoring to improve it competitiveness, especially in preparation for China's entry into the WTO, and continues to refine its financial architecture. U.S. companies have a generally favorable view of Hong Kong's business environment, including its legal system and the free flow of information, low taxation, and infrastructure. The American Chamber of Commerce's annual business confidence survey, released in December 2000, reflects what was then an emerging economic recovery, with 95% indicating the outlook for 2001 was "good" or "satisfactory"--compared to 85% last year. Survey results showed a positive outlook through 2005.

On the international front, Hong Kong is an active member of the World Trade Organization (WTO) and the Asia Pacific Economic Cooperation (APEC) forum, where it is an articulate and effective champion of free markets and reduction of trade barriers. Despite growing competition from the Mainland, Hong Kong residents across the political spectrum have supported China's accession to the WTO, believing this will open new opportunities on the Mainland for local firms and will stabilize relations between Hong Kong's two most important trade and investment partners, the United States and China.

Although the situation has improved substantially in recent years, intellectual property rights violations--pirated movies, audios and software--remain one of the highest issues on the bilateral trade agenda. Introduction of effective new legislation to control illicit production and improved enforcement has made Hong Kong a regional model of effective IPR protection. USTR and other U.S. agencies now regularly cite Hong Kong as an example for others. Hong Kong enjoys a high degree of autonomy as a separate customs territory, with no changes in borders, staffing, or technology export controls since the 1997 handover. The U.S. is pressing Hong Kong to liberalize significantly its civil aviation regime because of the benefits that would bring to U.S. airlines, shippers, and passengers.

FOREIGN RELATIONS
Hong Kong's foreign relations and defense are the responsibility of China. China has granted Hong Kong considerable autonomy in economic and commercial relations. Hong Kong continues to be an active, independent member of the WTO and the APEC forum.

U.S.-HONG KONG RELATIONS
U.S. policy toward Hong Kong, grounded in a determination to help preserve Hong Kong's prosperity, autonomy, and way of life, is stated in the Hong Kong Policy Act of 1992. The United States encourages high-level visits to Hong Kong as evidence of close ties and the importance of Hong Kong to U.S. interests.

The United States has substantial economic and social ties with Hong Kong. There are some 1,100 U.S. firms, including more than 400 regional operations, and 50,000 American residents in Hong Kong. According to U.S. Government statistics, U.S. exports to Hong Kong totaled $12.6 billion in 1999, and two-way trade totaled $23.1 billion, making Hong Kong the United States' 15th-largest trading partner. U.S. direct investment in Hong Kong at the end of 1999 totaled approximately $20.8 billion, making the United States one of Hong Kong's largest investors, along with the U.K., China, and Japan.

The Hong Kong Government maintains three Economic and Trade Offices in the United States. Addresses and telephone numbers for these offices are listed below:

1520 - 18th Street NW
Washington, DC 20036
Tel: (202) 331-8947
Fax: (202) 331-8958

115 East 54th Street
New York, NY 10022
Tel: (212) 752-3320
Fax: (212) 752-3395

130 Montgomery Street
San Francisco, CA 94104
Tel: (415) 835-9300
Fax: (415) 421-0646

Principal U.S. Officials
Consul General--Michael Klosson
Deputy Principal Officer--Ken Jarrett

The U.S. Consulate General is located at 26 Garden Road, Hong Kong. Tel: (852) 2523-9011 (general). FAX: (852) 2845-1598 (general): (852) 2147-5790 (consular); (852) 2845-9800 (commercial).

Web Sites
U.S. Consulate General web site: http://www.usconsulate.org.hk. The following sites are not U.S. Government web sites: Hong Kong homepage: http://www.info.gov.hk
Hong Kong Tourist Association: http://www.hkta.org
Hong Kong Trade Development Council: http://www.tdctrade.com.hk
For more information regarding visa requirements for Hong Kong, refer to the Hong Kong immigration web site: http://www.info.gov.hk/immd/english/topical/e/1.htm

[This is a mobile copy of Hong Kong (11/01)]