HONG KONG

Hong Kong Special Administrative Region

(SAR) of the People's Republic of China

COUNTRY OVERVIEW

LOCATION AND SIZE.

Hong Kong is located in eastern Asia. It borders the South China Sea to the south, west, and east, and shares a land border with mainland China to the north. It consists of 4 main areas: Hong Kong Island, Kowloon, the New Territories, and the Outlying Islands. Kowloon and the New Territories are on a peninsula, accounting for the bulk of Hong Kong's land. The New Territories link Hong Kong to mainland China. The Outlying Islands are made up of 234 islands in the proximity of Hong Kong, excluding Hong Kong Island where the capital city (Hong Kong) is located; the island is in the southern part of the territory. Lantau Island and Hong Kong Island are the largest islands. The entire territory, including its islands, has an area of 1,092 square kilometers (421 square miles), which makes it 6 times larger than Washington, D.C. The length of its land border and coastline are 30 kilometers (18 miles) and 733 kilometers (455 miles), respectively.

POPULATION.

Hong Kong's population was estimated to be 7,116,302 in July 2000. Its population increased from 4.4 million in 1975 to 6.7 million in 1998, indicating a growth rate of 1.8 percent. With an estimated growth rate of 0.8 percent, the population will increase to 7.7 million by 2015. In the year 2000 the estimated birth rate was 11.29 births per 1,000 people while the estimated death rate was 5.93 deaths per 1,000 people.

The majority of Hong Kong's population is of Chinese ethnicity, but non-Chinese constitute more than 8 percent of the population. Out of 595,000 foreigners residing in Hong Kong in 1999, 274,100 were from Asian countries (Philippines, Indonesia, Thailand, India, Japan, and Nepal) and the rest from Western countries (United States,Canada, United Kingdom, and Australia). The number of expatriates grew from 320,700 in December 1993 to 485,880 in December 1998.

The population of Hong Kong is old, with 18 percent of the population age 14 or younger and 71 percent between the ages of 15 and 64. This leaves 11 percent of Hong Kong's people 65 years old and up. Given the estimated low growth rate for the 1998-2015 period, the population will be even older by 2015 when 13.7 percent of the population will be over 65 years of age.

Hong Kong is a highly urbanized society. About 95.4 percent of its population lived in urban areas in 1998, an increase of 5.7 percent since 1975. The urban population is estimated to reach 96.7 percent by 2015. The capital city of Hong Kong and the Kowloon peninsula house the majority of the population.

OVERVIEW OF ECONOMY

During the first Opium War (1839-43), the British government colonized Hong Kong in 1841. Over time it established a free-enterprise economy in the colony and turned it into a trading center in Asia. Hong Kong has retained these characteristics since its hand-over to China in 1997, as stipulated in the 1984 Sino-British Joint Declaration on the transfer of Hong Kong's sovereignty to China. Accordingly, the Chinese government guaranteed that it would preserve Hong Kong's capitalist economy and its political and social systems for at least 50 years. This commitment was justified under the Chinese formula of "one country, two systems," which allowed for the coexistence of a capitalist Hong Kong with the socialist mainland China as 2 parts of 1 single country. The Chinese government also guaranteed that it would not intervene in the internal affairs of Hong Kong, and would let its government function independently in all its internal affairs, including economic policies. The Chinese central government in Beijing is in charge only of Hong Kong's foreign and defense issues. China's official acceptance of Hong Kong's mini constitution, the Basic Law of the Hong Kong Special Administrative Region, consolidated this arrangement when China's National People's Congress passed it in 1990. The latter guarantees free trade, free enterprise, and low taxes for at least 50 years.

Much of the anxiety of the pre-1997 period has proven to be baseless. China has kept its promise and Hong Kong continues to be a bastion of free enterprise. The territory has retained all its colonial financial and monetary policies and laws, including those regarding its currency, the free flow of capital into and out of its territory, and taxation. It uses its own currency, the Hong Kong dollar, and keeps its revenues for its own needs. Its government does not pay any tax to the Chinese central government. The hand-over has not changed Hong Kong's economy, but the post-1997 period has had at least 2 major impacts on it. First, this period has consolidated a change in the economy that began in the early 1980s. This was the transfer of large, sophisticated, and labor-intensive industries from Hong Kong to mainland China where there is no scarcity of land and raw material and where labor is significantly cheaper. As a result, existing manufacturing in Hong Kong mainly focuses on the necessary activities for the re-export of goods produced by Hong Kong enterprises in China. Being the largest economic sector even prior to 1997, Hong Kong's service sector has since grown significantly in the fields of trade and transportation. This was done to meet the increasing demand for re-exporting and to absorb the loss of jobs in the manufacturing sector. Second, there has been a growing interest in 2 new industries: high-tech and information technology (IT). This is a positive move towards the broadening of the service-dominated economy of Hong Kong. IT activities have also created new types of employment opportunities, most of which cannot be filled immediately due to a lack of skilled workers. Consequently, there were 18,400 vacant IT positions in 2000. The root cause of this problem is that those who have lost their jobs in other sectors (e.g. manufacturing) are either unskilled or have skills that are not in demand. The Hong Kong government has addressed this issue by increasing its spending on retraining programs by 5.4 percent in 1997-98, 11.8 percent in 1999-2000, and 42.8 percent in 2000-01.

Like many other Asian economies, the Hong Kong economy suffered from the financial crisis of the late 1990s. However, unlike most of them, it was able to cope with the crisis with tolerable losses and begin recovery in 1999. Its large service sector has been given credit for the economy's ability to recover. This sector has been the reason for a constant balance-of-payment surplus since 1997. In that year, Hong Kong had a balance-of-payment deficit of US$6.159 billion (equal to 3.6 percent of its GDP). However, it enjoyed 2 consecutive balance-of-payment surplus years of US$2.902 billion (equal to 1.8 percent of its GDP) and US$9.285 billion (equal to 5.8 percent of GDP) in 1998 and 1999, respectively. Figures for 2000 are not yet available, but there are indications of a surplus for that year as well. Unlike other Asian countries fallen victim to the 1997-98 financial crisis, Hong Kong's external debt has remained small in comparison to its available finances. For example, its total foreign debt was US$48.7 billion in 1998, US$53.5 billion in 1999, and US$56.5 billion in 2000 while its foreign exchange reserves were US$89.601 billion, US$92.236 billion, and US$97.218 billion, respectively. The crisis slowed down the economy temporarily, as reflected in a large drop in its GDP growth rate from 5 percent in 1997 to-5.1 percent in 1998. However, it did not lead to widespread closures of industries and companies or massive unemployment as experienced in Indonesia and Malaysia, for instance. The economy began to recover in 1999 and 2000 when the GDP growth rates jumped to 3 percent and 9.7 percent, respectively. Additionally, its unemployment rate reached the record high of 6.2 percent in 1999, only to drop to about 5 percent in 2000 despite the continued relocation of the manufacturing jobs to mainland China.

Geography and size impose certain limits on the economic activities that Hong Kong can undertake, but they also open opportunities for its economic growth. Maintaining extensive ties with China has been an imperative for the survival of this small territory, which has no mineral and water resources and lacks an adequate agriculture sector to meet its essential private and commercial needs. Being connected to China via land, Hong Kong has depended on its only neighbor for raw materials, food, and water. Its small size and acute scarcity of land also lead Hong Kong to look to China for the establishment of large and labor-intensive manufacturing establishments. This has been a blessing in disguise as China's low wages significantly reduce the cost of production of its exports and make them more competitive in international markets. Reliance on China has also helped Hong Kong penetrate the huge and growing Chinese market, the largest in the world and to which many developed economies are trying so hard to gain access. Not only are Hong Kong businesses interested in China, but the Chinese government also encourages extensive ties with Hong Kong, its reunified territory. Expanding economic ties with China also helps Hong Kong tolerate losses in its economic transactions elsewhere.

The service sector dominates Hong Kong's economy. This is the result of the territory's limited opportunities for agricultural and industrial activities on the one hand, and the interest of the British colonizers to develop it as a trading center on the other. Being the engine of economic growth, the service sector is the largest employer and the largest contributor to Hong Kong's GDP (84.7 percent in 1998). The major services are trade, financial services (e.g., banking and insurance), tourism, retail , and real estate. Trade has been the heart of Hong Kong's economy. The service sector has been growing steadily over the last few decades under British and Chinese rule alike.

Agriculture is negligible as a source of employment or revenue and makes only a miniscule contribution to GDP (0.1 percent in 1998). The scarcity of arable land leaves very limited opportunity for agricultural activities. Hong Kong is heavily dependent on agricultural imports.

Industry is a significant sector, but is mainly geared to the re-export of goods produced in China. This sector is small, accounting for 15.2 percent of GDP in 1998. Thanks to a lack of minerals, there is no mining industry of any significance. There is a small utility (water, gas, and electricity) industry, a relatively significant construction industry, and a more important export-oriented manufacturing sector. As a small territory with limited land and a very large population, Hong Kong cannot support heavy industries, which are land-intensive by nature. Nor can it have large labor-intensive industries. Besides low wages and an abundance of resources in China, space has been the main reason for the relocation of Hong Kong's large and labor-intensive industries to that country. The remaining industries of Hong Kong are small-scale establishments, which employ small numbers of workers. Garment production has been the leading component of the manufacturing sector for decades, but Hong Kong has other marketable products—mainly light and consumer goods such as footwear, toys, and plastics. Manufacturing lacks a significant high-tech segment, but has a viable electronics branch in need of development.

POLITICS, GOVERNMENT, AND TAXATION

The political parties of Hong Kong are at the initial stage of their development and do not represent a long tradition of political activities. Political parties were illegal until 1990. Being a British colony directly ruled by a British-appointed governor, the territory did not need active political parties. They seemed to be irrelevant to a political system whose executive branch, the Executive Council (Exco), and the legislative branch, the Legislative Council (Legco), were simply advisory bodies. The latter was run by appointed or selected businesspeople and professionals and not by elected politicians.

As part of the preparation for the hand-over of Hong Kong to China, efforts to democratize the Hong Kong political system led to the introduction of an elected Legco and the gradual elimination of legislative seats occupied by the British governor's appointees. These developments justified the creation of political parties. Yet, the Basic Law of Hong Kong provides for an election process, which undermines the status of the Legco as a truly democratic and representative body. Out of its 60 members, only 20 members are directly elected by popular votes. Functional constituencies (created by professional, business, and labor groups) elect 30 members, and an electoral committee (formed mainly by functional constituencies' chosen delegates) elect the remaining 10 members. Consequently, big business dominates Legco, which reflects the pre-eminence of business-oriented groups and the irrelevance of political parties in the running of Hong Kong and overseeing its economy.

In such a situation, the emerging political parties, which suffer from internal weaknesses, are practically out of the decision-making process and are therefore unable to have a major impact on the economy. Major politicians, including Chief Executive Tung Chee-hwa, do not have party affiliations and are prominent business figures.

The Hong Kong political parties are divided into 3 major groups: pro-democracy, pro-business, and pro-China. None of these groups advocate any economic policy to undermine the free-enterprise nature of the economy or the status of the territory as a center for free trade. The merger of 2 pro-democracy groups (the United Democrats of Hong Kong and the Meeting Point) formed the Democratic Party of Hong Kong in 1994, the largest pro-democracy party. It suffers from infighting on various issues, including economic issues. Pro-business parties include the Association for Democracy and People's Livelihood, the Hong Kong Democratic Foundation, the Frontier Party, the Citizens Party, and the Liberal Party. All these parties tend to advocate close ties with China and cooperate with pro-China groups. The major pro-China groups include the DAB (Democratic Alliance for the Betterment of Hong Kong). Not surprisingly, it also advocates close economic ties with China. The 3 largest parties in Legco are the Democratic Party of Hong Kong, the Liberal Party, and the DAB.

The Hong Kong government has a very limited role in economic affairs. This is in keeping with the proclaimed status of Hong Kong as a haven for unfettered free enterprise and free trade, in which the task of creating a viable economy is granted to the private sector . The intervention of the government in the economy is limited only to providing the essential services for its normal functioning and for creating an environment conducive to its growth. Therefore, government must ensure the existence of the required infrastructure for the daily life of the population and the economy—for instance, education, health care, communications, and telecommunications— with or without the involvement of the private sector. It must also ensure the absence of barriers to free economic activities. Such barriers include laws and regulations which complicate, impede, or prohibit economic activities such as difficult and lengthy processes for registration of economic establishments, various licenses for their activities, restrictions on the transfer of funds from and to Hong Kong, and the imposition of tariffs and restrictive export/import regulations.

To create a suitable environment for economic growth, the Hong Kong government imposes very few laws and regulations on economic activities. It continues the British policy of "positive non-intervention," meaning it levies low taxes to encourage economic activities and limits government expenditures as well as its role in providing essential services (e.g. education, health care, and housing). Apart from these functions, the government's role in the economy is limited to the extent justified for the well-being of the economy. In this regard, its first and foremost duty is to ensure the stability of the Hong Kong dollar, which demands the stability of the economy. To that end, in August 1998 it purchased US$15.3 billion worth of stocks to prevent the fall of the Hong Kong stock market and put it back in a healthy position. That move also prevented huge losses which could have seriously damaged the economy and weakened its currency.

Hong Kong's government gives a free hand to the private sector in practically all economic affairs pertaining to the 3 main economic sectors (agriculture, industry, and services), including investment, production, trade, and transfer of capital. For example, there is no need for a business to acquire a license in Hong Kong. Regardless of the nature of their activities, the only requirement for setting up businesses is to register them as companies; the registration process is not complicated. Nor is there any restriction on investments or on financial transactions regardless of size, including the transfer of funds from and to Hong Kong or the repatriation of profits and investments. Finally, tariffs do not exist in Hong Kong.

The private sector has been the main engine of growth before and after 1997. This sector also includes foreign businesses, which are treated practically like local ones. The only major restriction on foreign investors checks their involvement in television broadcasting concerns. These investors can buy up to 10 percent of the concerns' shares individually and cannot own more than 49 percent of the voting shares as a group. While there is no systematic restriction on the operation of foreign investors in Hong Kong, there is not any specific program to attract them either. The Hong Kong government believes that its territory's geographical location, its good infrastructure, its low taxes and absence of tariffs, and its very limited and simple business regulations make investment in Hong Kong attractive enough for local and foreign entrepreneurs.

TAXES.

The Hong Kong government imposes tax on salaries, employment-generated incomes, pensions, property incomes, and on revenues of economic establishments. The simple tax system is characterized by low tax rates, varying between 15 and 16 percent. All individuals who receive salaries, wages, or pensions are liable for income taxes , which are not more than 15 percent of their income. As an equity measure provided by law, 61 percent of the workforce does not pay tax on salaries. All corporations or individuals involved in any type of trade, business, or profession are liable for taxes on their profits, excluding those generated from the sale of capital assets. There is a flat rate of 16 percent for the business profit tax.

The Chinese government cannot tax Hong Kong in any manner, as stipulated in the Basic Law and the Sino-British Joint Declaration. The Hong Kong government keeps all revenues, including taxes, for its own use. In February 1998, Hong Kong signed a treaty with China to eliminate double taxation of their respective businesses operating in each other's territory.

Taxes account for more than 50 percent of government revenues. The amount of direct and indirect taxes (personal and corporate) collected in the fiscal years 1998 and 1999 was US$9.7 billion and US$4.9 billion, respectively. The total amount accounted for 52.5 percent of the total government revenue of US$27.8 billion. This showed a drop in both the absolute amount of collected taxes and in the percentage of their contribution to the government revenue in 1997-98. In that fiscal year, the government collected US$11.7 billion in direct taxes and US$8.39 billion in indirect taxes. The total collected taxes contributed to 55.4 percent of the government revenue of US$36.2 billion. The financial crisis of 1997-98 caused a slowdown in the economy and lowered the amount of collected taxes in the fiscal year of 1998-99. Transportation services, including those related to seaports and airport, and capital revenues (i.e. revenues generated from investments by the Hong Kong government) are 2 other major sources of government revenues. They accounted for 44.6 percent (US$16.11 billion) and 47.5 percent (US$13.2 billion) of such revenues in the fiscal years of 1997-98 and 1998-99, respectively. In the same years, the government's share of capital revenues fell from 29.4 percent (US$10.6 billion) to 22.8 percent (US$6.3 billion), while the share of transportation services rose from 15.2 percent (US$5.3 billion) to 24.7 percent (US$6.7 billion). A growth in the use of port facilities by China-based enterprises was the main factor for the rise.

The judicial system of Hong Kong plays a major role in the economy. It is an independent body in charge of ensuring the continuation of the rule of law in all fields, including in the economy as set prior to the hand-over of Hong Kong to China and as stipulated by the Basic Law. This is essential for the free enterprise economy of Hong Kong, as it guarantees the right of its people to private property and to engage in legitimate economic activities. It also guarantees the unrestricted economic environment of Hong Kong and prevents government intervention in Hong Kong's economic affairs, which would have a negative impact on the status of the territory as a bastion of free enterprise. This status has been the major factor for the phenomenal economic growth of Hong Kong and its continued attractiveness to local and international investors. Finally, the continuation of rule of law is a guarantee against any attempt on the part of the Chinese government to intervene in the internal affairs of Hong Kong and to impose its laws and regulation on that territory.

The Hong Kong courts are in charge of upholding laws, rights, and freedoms, including respect for private property and all rights and laws necessary for the continuation of economic activities. These courts are independent and exercise jurisdiction over all cases except those falling under the jurisdiction of China's central authority, namely defense and foreign affairs.

INFRASTRUCTURE, POWER, AND COMMUNICATIONS

Hong Kong has a superb infrastructure, which meets its population's needs and contributes to the efficiency and growth of the economy. Hong Kong has an advanced land, sea, and air transport and communications system, including 1,831 kilometers (1,138 miles) of paved roads (1997 est.) and 34 kilometers (21 miles) of electrified railways (1996 est.). The railway system is one of the most efficient systems of the world and is connected to Chinese railways via the Kowloon peninsula. The construction of 3 new lines was begun in 1998. In 2000, the Hong Kong government hinted at a huge project to construct 6 more lines to facilitate (make easier) rail traffic between Hong Kong Island and the rest of the territory and also to improve freight links with mainland China to meet the expected future needs.

Hong Kong's land transportation services are very efficient. To decrease the level of air pollution, its government encourages the use of public transportation

services and discourages the use of private cars in its small territory. It therefore keeps improving public transportation services while increasing the cost of maintaining private cars through various measures such as high car-registration fees, a compulsory inspection for cars over 6 years old, and a point system to disqualify offending drivers. Public transport facilities include the mainly underground Mass Transit Railway, which provided services to 2.2 million passengers every working day in 1999. It also includes very efficient bus services run by 4 private companies, supplemented by public and private light minibus services. A line of streetcars, about 18,000 taxis, 113,770 cargo vehicles, and 321,617 private cars further facilitated passenger movements in 1999.

Sea communications are vital for Hong Kong, both for trade and daily life. There are at least 5 major ferry companies providing daily service between the islands where its population lives and works. Hong Kong is a major port in Asia and one of the busiest container ports in the world. It handled 6.2 million twenty-foot containers in 1999. To meet future increases in cargo handling, an expansion of its container terminal facilities began in the same year.

Hong Kong's eminent status as a major international port could be undermined in 2 ways. First, Taiwan and Singapore rival Hong Kong by improving their port facilities regularly. Second, a major portion of Hong Kong's cargo handling is shipping of re-exports to and from China, which will decrease as China develops its mainland ports. Besides its good port facilities, Hong Kong has a very advanced commercial fleet, which operated 38,000 vessel departures in 1999. In the same year the capacity of its cargo fleet was 215,226 metric tons.

Hong Kong has high-quality private airlines and was home to 3 modern airports with paved runways and 2 heliports as of 1999. A new Hong Kong international airport, Chek Lap Kok Airport, replaced the old international airport (Kai Kak airport) in 1998. Kai Kak Airport handled 30 million passengers and 1.6 million tons of cargo in 1997. Located on Lantau Island, the new airport is one of the world's best airports, and is capable of handling up to 460 flights a day. Its annual passenger and cargo capability is 87 million passengers and 9 million metric tons of cargo, respectively.

Hong Kong's utility services are excellent even though they are highly dependent on imports for their daily operations. The territory has no source of fresh water, which makes it dependent on China for all its water needs to run its efficient water system.

Hong Kong has the highest rate of energy consumption per capita in Asia. For example, in 1998 its electricity consumption per capita was 5,569 kilowatt hours (kWh) compared to mainland China's 922 kWh. Hong Kong imports all its needs in fuel for private and commercial consumption, and power generation amounted to 18 million metric tons of oil in 1998. Hong Kong also imports gas from China and liquified gas through oil companies such as Shell, Mobil, Esso, Caltex, and China Resources, while producing gas from naphtha (a mixture of liquid hydrocarbons made from distilling petroleum, coal tar, and natural gas) at home. The value of its energy imports increased from about US$3 billion in 1998 to US$3.5 billion in 1999.

Two private companies supply electricity to Hong Kong and each has a monopolized area. In addition to the generated electricity in its 3 fossil-fuel power stations, Hong Kong imports electricity from China, including from the Daya Bay atomic power station, a Chinese government-Hong Kong joint venture . The power generation capacity of the 2 private companies (9,590 megawatts [mw] in 1998) is well above the demand (8,620 mw in 1998). This guarantees a continuous supply of uninterrupted power.

The telecommunications system of Hong Kong is excellent, consisting of fixed-line and cellular services. In 1998, there were 3.7 million fixed-line telephones and 2.4 million cellular phones in use. Hong Kong has one of the highest rates of usage of cellular phones in the world. In 2000, for instance, 55.6 percent of its population (3.9 million people) owned cellular telephones, an increase of 1.5 million from 1998. Personal computers are widely used and their availability is high (254 computers per 1,000 people in the same year). Internet services were provided by 49 Internet service providers in 1999.

Cable & Wireless HKT, a private company, dominates the telecommunications market. It had a 100 percent monopoly until 1997, when the Hong Kong government began to end its monopoly by encouraging competition. Through licensing of 3 new companies, the government reduced the market share of Cable & Wireless HKT to 97 percent in 2000. In that year it announced the licensing of 5 more companies.

Radio and television services are also advanced. In addition to foreign cable and satellite TV programs, 20 AM and FM radio stations and 4 television networks were operating in 1997. The number of televisions and radios in use in that year were estimated to be 1.84 million and 4.45 million, respectively.

ECONOMIC SECTORS

The economy of Hong Kong survived the financial crisis of 1997-98. This service-dominated economy began its recovery in 1999 and continued it in 2000 thanks to its viable service sector. To a varying extent, the 3 economic sectors suffered from the crisis. The impact of the crisis on agriculture, the smallest sector with a very small contribution to the Hong Kong economy, was negligible. However, the industry and particularly the service sectors suffered considerably and experienced contraction during the crisis period. The CIA World Factbook reported the percentages of each sector's contribution to GDP in 1997 to be agriculture, 0.1 percent; industry, 14.7 percent; and services, 85.2 percent. As the largest and dominant economic sector, the service sector has always been the engine of growth and includes international trade, financial services, tourism, retail, and real estate. These service industries are the largest employers and taxpayers.

The industry and service sectors have undergone structural changes over the last decades. The catalyst has been the gradual relocation of large and labor-intensive manufacturing to mainland China, which began in the early 1980s. This trend has been reinforced since the 1997 hand-over of Hong Kong to China. As a result, the industry's manufacturing branch has been shrinking. The service sector has been expanding to re-orient itself towards functions pertaining to China's international trade.

The reunification with China has not changed the business-friendly environment of Hong Kong. As promised, China has respected the autonomy of the territory in its internal affairs, including its economic policies. China's approach has bolstered the confidence of the local and international business community in the stability and predictability of Hong Kong, which became somewhat shaky on the eve of the 1997 hand-over. Hong Kong is as friendly as ever to local and foreign investors, including Western (American, British, French, Swiss, and Dutch) and non-Western (Japanese and South Korean) multinational corporations (MNCs).

AGRICULTURE

Hong Kong has a small agricultural sector, including fisheries, with a very limited productivity and insignificant role in the economy. Its contribution to GDP and share of the workforce was about 0.1 percent in 1998. The available arable land is extremely limited in Hong Kong, where land is generally scarce. Less than 7 percent of Hong Kong's land is used for agricultural activities, i.e., farming and fish farming. As the available farming land cannot produce enough food for the Hong Kong population of more than 7 million, the population survives on large imports of agricultural products valued at US$8.32 billion in 1998, which fell to US$7.335 billion in 1999 as a result of the financial crisis. China is the main exporter of these products.

The scarcity of land has determined the nature of agricultural activities. Instead of land-intensive and low-priced rice and grain production, 2 lucrative activities (vegetable farming and flower growing) have become the dominant activities, accounting for 93 percent of the total value of crops grown in 1998. The scarcity of pastoral land sets limits on animal husbandry, and has led to the rearing of only poultry and pigs. Domestic production accounted for 10 percent of live poultry and 16 percent of live pigs in 2000.

Fishing is a very small source of employment, but its products meet a significant portion of demands for seafood. They amounted to 75 percent of the fresh marine consumption and 11 percent of the freshwater fish consumption in 2000. Fish ponds produced 4,900 metric tons of freshwater fish in 1998, and the fresh marine catch was 188,000 metric tons. In 2000, the fishery fleet consisted of 4,460 vessels of various sizes, of which 3,820 were motorized.

INDUSTRY

Industry has experienced a slow decline over the last 2 decades. Its contribution to GDP was 15.2 percent (equal to US$23 billion) in 1998, a significant decrease from its 1990 contribution of 17.7 percent. Its share of the workforce, which was 28 percent in 1990, dropped to about 15 percent in 1998. The decline of industry has been the outcome of a steady contraction in manufacturing, the result of the continued relocation of manufacturing establishments to mainland China. Manufacturing's share of GDP sharply fell from 24.3 percent in 1984 to 6.2 percent in 1998. The constant expansion of the service sector has also contributed to the process of decline. Other activities, such as construction, energy, and mining, are not significant enough to stop the steady decline of the industrial sector.

The largest sector of industry is manufacturing. It is a major contributor to GDP (6.5 percent in 1998) and the workforce (7.3 percent in 1998, or 245,457 employees). Manufacturing's contribution to the workforce dropped to 7 percent (244,720 employees) in 1999, and the value of manufacturing exports also fell from US$10.31 billion in 1998 to US$9.42 billion in 1999, suggesting that the sector was beginning to contract.

There were 23,553 manufacturing establishments in Hong Kong in 1998. Known as "flatted factories," these establishments are mostly very small and located on 1 or 2 floors of a high-rise building. The average number of employees per establishment is 10. The migration of many large and labor-intensive industries to mainland China resulted in the loss of more than 500,000 industrial jobs in the 1990s.

Certain factors have created "natural" barriers to the growth of the manufacturing sector and have forced a peculiar pattern of development on it. Scarcity of land, the absence of mineral resources, the high cost of labor, and the close proximity to China have ruled out the establishment of heavy industry or other land-and labor-intensive industries in Hong Kong. Prior to the 1980s, Hong Kong produced mainly labor-intensive consumer products, including food, beverages, clothing, textiles, printed products, and fabricated metal products. Being a resource-and land-rich country with a very low-wage labor force , China became a "natural" place for Hong Kong's manufacturing in the 1980s. Improved relations between the 2 sides made the relocation of major industries to China feasible. China's growing interest in foreign investment facilitated the process.

The result was a re-structuring of Hong Kong's manufacturing sector. Labor-intensive and sophisticated industries were moved to China, mainly to the neighboring Guangdong Province, while light and capital-intensive industries were kept in Hong Kong. This trend is continuing. Given the removal of all political barriers and the willingness of the Chinese government, it is simply logical for Hong Kong industrialists to continue their establishment of the labor-and land-intensive industries in China where they have access to minerals, low-cost labor, and abundance of land. Their products are exported via the very modern and efficient port of Hong Kong.

The existing Hong Kong industries are small-scale operations. They are involved mainly in certain manufacturing processes pertaining to re-exporting goods produced in China by Hong Kong-owned establishments. These processes can involve the packaging of goods produced on the mainland, for instance. However, there are still export-oriented industries that produce textiles, electronics, plastics, and watches and clocks. The textile industry is the largest industrial employer and accounts for the bulk of annual domestic industrial exports, accounting for 45 percent (US$11.3 billion) and 49 percent (US$10.79 billion) of those exports in 1998 and 1999, respectively.

The electronics industry, including telecommunications, is the second largest export earner, but it is small and underdeveloped. The value of its exports was US$4.24 billion in 1998 and US$3.55 billion in 1999. Its products are generally of lower quality compared to other Asian products such as those of Singapore and Taiwan. Its rapid growth over the last 3 decades is owed to large foreign investments and transfer of technology. This situation makes it highly dependent on foreign sources for investments and parts; local industries can produce only 20 percent of the necessary parts. The electronics industry produces various sophisticated products, including semiconductors, computers, televisions and telecommunications equipment. The Hong Kong government has sought to help expand this industry, especially in the fields of computer products, in order to diversify the economy, now heavily dependent on services.

The plastics industry has been shrinking in Hong Kong, with most of its manufacturing establishments being moved to China. Nevertheless, Hong Kong is one of world's largest toy exporters. The exports of plastic goods generated about US$210 million in 1998 and US$163 million in 1999.

A major component of the industrial sector is the construction industry. It accounted for 6.1 percent of GDP and employed 2.2 percent of the workforce (72,253 employees) in 1998. In the aftermath of the Asian financial crisis, a decline in construction activities lowered its share of the workforce to 2.1 percent (71,789 workers) in 1999, but government-financed infrastructure projects increased its share to 79,300 employees in June 2000. The constant government investment in infrastructure and private sector investments in related fields (such as housing and commercial establishments, which total more than 50 percent of investments in the sector) make construction a viable industry.

The industry has gone through periods of expansion and contraction for political and economic reasons since the 1980s. Politically, the smooth hand-over of Hong Kong to China encouraged investment in private and commercial construction projects in 1998 and 1999. Recent economic factors include a 1994 government policy on buying and selling unfinished apartments. That policy made those transactions more difficult and therefore lowered property prices, resulting in a reduction in investment in apartment building projects. Thanks to a wide range of road and railway expansion projects, the construction industry is expected to experience a period of growth in the first half of the decade (2000-10).

The utility industry is a vital sector in Hong Kong, which lacks freshwater and fossil energy resources. As discussed earlier, several companies ensure uninterrupted supplies of water and energy (electricity and fossil fuel) for private and commercial purposes through imports of water and both limited local production and large imports of energy. Despite its importance, the utility industry is small and employs an insignificant portion of the work-force, but its contribution to GDP is significant (2.4 percent in 1998).

There is no mining industry of any significance in Hong Kong, as the territory lacks mineral resources. The share of mining and quarrying activities of GDP was about 0.02 percent in 2000. Cement production is the most important activity of this sector.

SERVICES

The service sector dominates the Hong Kong economy. In the absence of a significant agriculture and a large and growing industrial base, it has become the largest economic sector in terms of income-generation, employment, and contribution to GDP. The contraction of the manufacturing sector has contributed to further enlargement of the service sector to absorb the growing number of those laid off from manufacturing jobs, a continuing trend since the 1980s. So far, this strategy has been successful, but there are concerns about the future ability of the service sector to absorb manufacturing job losses, especially because many of the affected workers are middle-aged and/or unskilled or poorly skilled. The contribution of services to GDP was 84.7 percent (equal to US$129 billion) in 1998, when they employed roughly the same proportion of the workforce.

The service sector consists of a wide range of companies of various sizes—local and foreign, including multinational corporations (MNCs)—interested in Hong Kong for its many opportunities for service activities. The major services are financial, trade, tourism, retail, real estate, and transportation.

Finance, insurance, real estate, and investment services are the most viable economic activities, which have made Hong Kong a major global financial center. These services accounted for 26.2 percent of GDP and employed 390,454 people (11.6 percent of the workforce) in 1998. The number of employees rose to 415,326 (11.9 percent of the workforce) in 1999, and to 429,300 (about 12 percent) in June 2000.

Banking is the heart of Hong Kong's financial services. In terms of the volume of external transactions, Hong Kong is the ninth-largest international banking center in the world. It is home to many local and foreign-owned banks. Banking makes a major contribution to the growth of the Hong Kong economy, and the huge revenues generated in this sector help the territory to tolerate fluctuations in its manufacturing exports and pay its foreign debt.

Hong Kong does not have a central bank, but the Hong Kong Monetary Authority (HKMA) assumes some of the functions of a central bank, namely monetary management, supervision of the banking sector, and regulating financial institutions. However, the issuance of bank-notes is the task of 3 banks: the Hong Kong and Shanghai Banking Corporation (HSBC), the Standard Chartered Bank, and the Bank of China. In 2000, Hong Kong's banking system consisted of 285 authorized banks and 127 representative offices of other financial institutions. Of Hong Kong's 158 licensed (full-service) banks, 125 were registered outside Hong Kong.

Most major American, Japanese, and European banks operate in Hong Kong. There are also Thai and Taiwanese banks as well as 3 major state-owned banks from mainland China. In general, foreign banks concentrate mainly on large business clients (such as MNCs), unlike local banks, which tend to be more interested in small- and medium-size clients. Apart from its importance as an international trading center, Hong Kong's access to the growing market of China is the major reason for its attractiveness to foreign banks, through which they can enter the Chinese market. Foreign banks have a free hand for banking operations. The only restriction on their activities is a limit on their branch operations, meaning that in 2000 they could have only 3 branches.

The large and efficient insurance industry of Hong Kong is among the best such industries in Asia. This growing segment of the economy consists of 204 authorized insurers, of which 148 are general insurers, 43 long-term insurers (mostly life insurers), and 19 combined life and non-life insurers. The insurance companies include foreign ones, e.g., American (22) and British (18). In general, the industry has experienced growth over the last decade, excluding the year 1999, when the economy was not performing well. Its average annual growth rate was 10.7 percent during the period 1993 to 1998.

Hong Kong's retail sector is well developed. The total value of retail sales was about US$25 billion in 1998, equal to 15 percent of GDP. The industry includes a wide range of establishments, including small privately-owned stores, foreign department store chains (e.g., British and Japanese), supermarkets, and domestic retail chains. There are also many large shopping malls housing a wide range of stores. The retail industry includes a large network of restaurants, including international franchises.

Hong Kong's transportation industry, including storage and communications, has developed over the last few decades to meet growing demand in international trade and internal movement of goods and people. As mentioned previously, the territory has an advanced land, sea, and air transportation infrastructure. This industry is a major contributor to GDP, accounting for 9.1 percent in 1998 (equal to US$14.88 billion), and a large employer with 175,000 employees in the same year. The number of employees jumped to 180,600 in June 2000, which indicated 3.2 percent growth from 1998.

The vivid night-life of Hong Kong, including its numerous night clubs and restaurants, and its low-priced imported goods (thanks to the absence of tariffs) attracts millions of tourists to this small territory every year. To host and entertain them, Hong Kong's tourist industry has become extensive and highly developed. The industry makes a significant contribution to GDP (4.15 percent in 1998 and 4.09 percent in 1999) and generates employment for a large portion of the workforce. Restaurants and hotels are major employers of this industry. Together with trade, they accounted for 27.2 percent (equal to 913,070 jobs) and 28.8 percent (equal to 1,002,263 jobs) of the workforce in 1998 and 1999, respectively. There are many hotels, including local and foreign five-star hotels, with 35,420 total rooms in 1999, which are fully capable of providing high-quality services to tourists. In the same year, 10,678,000 tourists visited Hong Kong and generated US$6.5 billion in revenues. In comparison to 1998, this showed an increase of 1,103,000 tourists, but a decrease of US$300 million in revenue. The major factors responsible for this phenomenon were an increase in the number of low-income Chinese visitors at the expense of high-income non-Chinese visitors that led to an overall fall in spending per head from US$715 in 1998 to US$615 in 1999.

A decline in the number of non-Chinese tourists and in the average amount of tourists' spending has created a concern about the declining interest in Hong Kong as a tourist destination. Apart from short-term reasons, 2 major factors endanger the industry in the long run. One factor is the existence of less expensive destinations in Asia offering the same quality of services (such as Singapore). Another is the expected easing of travel restrictions between China and Taiwan. This development may diminish the attractiveness of Hong Kong for the Chinese and especially for high-spending Taiwanese who have had to go through points such as Hong Kong to get to each other's countries, because of the current travel restrictions between China and Taiwan. To address this concern and to ensure a significant increase in tourism, the Hong Kong government has sought to attract more tourists through a joint venture with an American company, Walt Disney, to establish a theme park. It is expected to bring 5 million visitors in its first year of operation (2005) and 10 million by 2020.

INTERNATIONAL TRADE

International trade is Hong Kong's most important economic activity. Its government policy towards trade reflects Hong Kong's status as a center of free trade. This policy contains minimum restrictions and allows the market forces to regulate exports and imports. It therefore proscribes protective measures (e.g., tariffs and quotas) and subsidies as a means for avoiding balance-of-trade deficits.

Hong Kong is a major exporter and importer of goods and services in Asia. It exported US$175.8 billion in goods and US$34 billion in services in 1998. In the same year the value of its imports was US$183.7 billion for goods and US$11.7 billion for services. As a result of the financial crisis of 1997-98, the value of its international trade decreased in 1999 when it exported US$174.7 billion worth of goods and US$35.7 billion worth of services while importing US$177.9 billion in goods and US$13.2 billion in services.

Exports consist of goods produced in Hong Kong (domestic exports) and those produced in Hong Kong-owned industries in China (re-exports). Re-exporting has become the largest component of Hong Kong's trade since the early 1980s, when its large and labor-intensive industries began to move to mainland China. For example, between 1986 and 1996, the volume of re-exports and domestic exports rose by about 700 percent and 17.3 percent, respectively. The small contribution of domestic exports to total exports was evident in 1999, for instance, when the total value of exports of goods was US$174.7 billion, of which the share of domestic exports was only US$21.9 billion. Because of the growing value of re-exports, Hong Kong has experienced a constant balance-of-trade deficit since the 1980s. As recent examples, the deficit was

US$17.298 billion in 1997, US$7.833 billion in 1998, and US$3.158 billion in 1999.

Consumer goods and light manufactures are the major exports of Hong Kong. In order of importance, they include apparel and clothing, electrical machinery and apparatus, textile yarn and fabric, office machinery and data processing equipment, watches and clocks, telecommunications equipment, jewelry, printed matter, plastics, toys, games, and sports goods. The major re-exports consist of consumer goods, raw materials, metals (iron and steel), semi-manufactures, capital goods , foodstuffs, and fuels. Hong Kong's major imports include consumer goods, raw materials, semi-manufactures, capital goods, foodstuffs, and fuels.

Hong Kong has lost most of its manufacturing capability since reunification with mainland China. Its most important domestic export industries are garments, textiles, and clothing, which accounted for 49 percent of its 1999 domestic exports. The Hong Kong government has tried to diversify this sector by encouraging the high-tech industry, which has expanded over the last decade, but its share of domestic exports is still small. For example, telecommunications equipment accounted for 2.2 percent of the domestic exports in 1999, valued at US$486 million.

The major trading partners of Hong Kong are China, the United States, Japan, the United Kingdom, and Taiwan. Its main export destinations in 1999 were China (33.4 percent), the United States (23.8 percent), Japan (5.4 percent), and the UK (4.1 percent). In the same year, its main sources of import were China (43.6 percent), Japan (11.7 percent), Taiwan (7.2 percent), and the United States (7.1 percent). Because of re-exports, China has become the largest trading partner of Hong Kong.

MONEY

The government of Hong Kong pegged the Hong Kong dollar to the U.S. dollar in October 1983 at a fixed exchange rate of HK$7.8 against US$1, and has continued

this relationship as of 2001. Meant to ensure the stability of the Hong Kong dollar, this policy has been implemented under the Linked Exchange Rate System. This system subjects any change in the size and flow of the money in circulation to a corresponding change in the foreign exchange reserves of Hong Kong. This occurs whether as a result of Hong Kong's domestic resources or as a result of an inflow of foreign capital. Accordingly, the 3 banks in charge of issuing bank notes can do so only if they deposit an equivalent amount of U.S. dollars in an exchange fund kept by the Hong Kong Monetary Authority (HKMA) for any amount of HK dollars that they want to issue. The equivalent amount of these foreign currencies is determined at the fixed exchange rate of HK$7.8/US$1. Apart from this official exchange rate , there is also a free- floating exchange rate . This exchange rate has remained around 7.7 since 1995. While the official exchange rate of the HK dollar against the U.S. dollar is fixed and determined by the HKMA, the exchange rate of the HK dollar against any other major currency follows the U.S. dollar exchange rate against that currency, which makes it a free-floating rate.

The HKMA maintains the stability of the HK dollar-U.S. dollar exchange rate through an automatic interest-rate adjustment mechanism. This requires the control of local liquidity and interest rates. Through this mechanism, Hong Kong has managed to have monetary stability and avoid high inflation rates and sharp fluctuations in the value of the national currency. This has made a major contribution to the stability and growth of its economy, which has not experienced long and sudden periods of economic declines with their destructive impacts on employment and prices. The Hong Kong monetary policy has also helped its economy cope better with the financial crisis of the late 1990s, which devastated many Asian economies. However, this policy has a negative side since it links the HK dollar to the U.S. dollar and leaves little room for independent monetary policy of Hong Kong since it has to follow that of the United States.

Consistent with its status as a strong base for free enterprise, there is no official control on foreign currency exchange transactions in Hong Kong. Regardless of their size, there is no restriction on transfers to and from Hong Kong of funds in any currency, including the HK dollar.

The Stock Exchange of Hong Kong (SEHK) was established in 1986 as a result of the merger of 4 stock exchanges. Having a market capitalization of US$616.3 billion (June 2000), the SEHK is one of the world's major stock markets, and the second largest stock market in Asia after Japan.

POVERTY AND WEALTH

Hong Kong is a prosperous territory with a high GDP per capita (US$18,813 in 1998). However, the distribution of income is uneven and there is a wide gap between social groups in terms of wealth and income. Large parts of the economy are dominated by a small group of tycoons who are among the richest people in the world and whose wealth is increasing. At the same time, there is a growing number of unemployed with practically no chance for rejoining the workforce. They are the victims of the migration of manufacturing establishments to mainland China who are middle-aged and unskilled or whose skills are not in demand. The service sector has absorbed a large portion of manufacturing unemployed since the 1980s, but the continuation of this trend is unlikely, since the skills of the unemployed often do not match those of the available positions.

The role of the Hong Kong government in the economy is minimal, but it has an extensive role in providing essential services, including health care, education, and housing. The health-care system, which provides high-quality standard services, is accessible by the entire population. Government-run hospitals dominate the medical institutions and provided 85 percent of hospital beds in 1996, but there are also private medical clinics and hospitals.

Government-provided health-care services are not free, but their fees are low, as these services are subsidized. Costs of medical services can be waived if patients cannot afford them. Government spending on the health-care system receives a large percentage of its total annual spending, increasing from 11.1 percent in 1989-90 to 14.3 percent in 1996-97. The government has considered reforming the health-care system since the cost has been increasing. If the current situation continues, this cost will absorb 21 to 23 percent of total government spending in 2016. Government spending on health-care services amounted to US$3.4 billion in 1998-99. Hong Kong's high life expectancy (78.6 years in 1998) ranks the territory fifth among the top developed economies after Japan (80 years), Canada (79.1), and Sweden and Switzerland (78.7 years). This rank puts it far ahead of China with its life expectancy of 70.1 years in 1998. In addition to the absence of widespread malnutrition and the availability of safe water and adequate sanitation, Hong Kong's impressive high life expectancy indicates the efficiency of its health-care system.

Hong Kong has a very good system for basic education, thanks to significant government spending. Total public funds spent on education were equal to 4.2 percent of GDP (US$4.6 billion) in 1998-99, an increase of about US$500 million from the previous year. About 92.9 percent of its population was literate in 1998. The government provides free and compulsory education for children between the ages of 6 and 15. Children over the age

of 14 who wish to continue their studies at the high-school level must pay for their education, but there are government subsidies for those who cannot afford it. In 1998, for example, the government subsidized the education of 84 percent of children of school age. Hong Kong's post-secondary educational system includes 7 universities, which offer degree programs to 18 percent of the 17-to-20 age group who wish to enter university programs. There were 65,800 university students in 1998, an increase of 11,800 from 1994.

Despite its merits, the education system has certain problems. Its inability to train people with the skills required for the economy is the main problem. This has resulted in a vacancy of thousands of jobs in the high-tech industry, for instance, while there is a large number of unemployed with skills irrelevant to the changing economy. Another significant problem is discrimination against the physically and mentally disabled in education, despite the existence of anti-discrimination laws. Finally, some primary schools operate 2 sessions a day at the expense of lowering educational standards.

WORKING CONDITIONS

Hong Kong has a large and growing labor force. Its numeric strength has increased steadily from 3,000,700 in 1995 to 3,476,600 in 1999, in spite of the 1997-98 financial crisis. Over the last 3 decades, Hong Kong's unemployment rate has usually been small. The average unemployment rate during from 1985 to 1997 was 3.5 percent, as the growing service sector could easily absorb many of those who had lost their manufacturing jobs. During the 2 years prior to the financial crisis, the unemployment rate declined from 3.2 percent in 1995 to 2.6 percent in 1996, and to 2.2 percent in 1997. The crisis and its aftermath pushed the rate up to 4.7 percent in 1998 and 6.2 percent in 1999 (equal to 217,100 people). The latter was a record high for Hong Kong. The rate fell to about 5 percent in 2000.

The overwhelming majority of Hong Kong's work-force is employed in urban economic establishments, due to the insignificance of agriculture. The workforce is a mixture of skilled and unskilled workers. The old and middle-aged manufacturing workers tend to be unskilled or low-skilled, whereas those employed with the growing service industries are more likely to be better educated and possess more advanced skills, including those related to high-tech and information technology. There was a shortage of skilled workers for the service sector as well as for the growing high-tech manufacturing sector in 2000.

In keeping with its emphasis on free enterprise, Hong Kong gives the market the authority to determine wages. Apart from a small number of professions with a uniform wage structure, wages are determined by supply and demand. Individual agreements between employees and employers set wages. Thus, there is no minimum wage except for foreign domestic workers, which was set at about US$500 per month in 1998. Employers of such workers are required by law to provide a decent standard of living for their employees, including housing and food, but the law is not widely observed. Two-income households are common in Hong Kong, although the average wage is usually adequate for most workers and their households. In addition to wages, some employers provide their employees with various kinds of allowances (e.g. free medical services and daycare centers), but employers are not obliged by law to do so. As part of the social safety net, employees are entitled to benefits such as pensions, disability insurance, and food assistance.

Hong Kong is a member of the International Labor Organization (ILO), and has laws and regulations on working conditions. These include laws on safety and health conditions at the workplace verified by government inspections. Workers' safety has improved over the last 2 decades, partly because of such inspections and partly because of the transfer of many high-risk manufacturing jobs to China. Nevertheless, there are still many serious safety problems.

Labor laws also include workers' rights, in accordance with international agreements. For example, the right of association is recognized, and trade unions are legal. There were 558 employee unions in 1998, but they represented only 22 percent of the 3.1 million salaried employees and wage earners. Unions are not strong and are unable to impose collective bargaining on management. Consequently, collective bargaining is not widely practiced as a means of settling labor disputes. Generally speaking, work stoppages and strikes are permitted, but there are some restrictions on civil servants' involvement in such activities. In practice, these activities could lead to loss of employment since most workers must include an article in their employment contracts that their refusal to work is a breach of their contracts. This gives the right to employers to dismiss workers involved in strikes or stoppages. There have not been major strikes or similar labor activities over the last 2 decades.

Hong Kong's labor laws also include provisions to ensure the rights of certain social groups and prevent their exploitation. In general, forced labor is prohibited. Employment of children under the age of 15 in industrial establishments is also prohibited. Nevertheless, children between 13 and 14 years of age with a minimum of 9 years of education can work in certain non-industrial establishments if their employers can ensure their safety, health, and welfare. These children are not allowed to work overtime and cannot work for more than 8 hours a day and 48 hours a week. With the exception of male workers of 16 and 17 years of age, children are not allowed to work in dangerous trades. There is also an anti-discrimination law to protect women in the labor market. Women are well-represented in government and in the civil service (46 percent of senior civil servants are women), but they are not nearly as numerous in other prestigious areas. This includes the judiciary, where only 18 percent of senior employees (judicial officers and judges) are women. The physically and mentally disabled are discriminated against in employment and education in spite of the existence of anti-discriminatory laws.

COUNTRY HISTORY AND ECONOMIC DEVELOPMENT

1841. Hong Kong is seized by the British navy at the height of the first opium war (1839-42). The Chinese government is forced to accept Britain's sovereignty over the island by signing the Convention of Chuenpi.

1842. The British Royal Charter formally establishes Hong Kong as "a separate colony." The British government proclaims Hong Kong a free port, which encourages immigration from mainland China to Hong Kong. The United States government establishes the first foreign consulate in the colony.

1844. To control the Chinese population, the Hong Kong Legislative Council (Legco) passes a restrictive law which leads to a general strike, the return of many workers to China, and the paralysis of businesses. The Legco amends the law to restore normalcy.

1856. The Second Opium War (1856-58) begins. The Chinese workers of Hong Kong go on a strike and boycott British businesses.

1860. Britain expands its holdings in China by occupying Kowloon and Stonecutters Island. The Treaty of Beijing legalizes the occupation by leasing these lands to Britain in perpetuity.

1860s. Hong Kong's population grows significantly as a result of migration from mainland China. Its economy begins to flourish. Hong Kong's infrastructure emerges, including telegraph systems, street gas lighting, and secular schools.

1898. In the aftermath of the Sino-Japanese war (1894-95), the British government forces the weakened Chinese government to cede to Britain the New Territories and 235 islands in the proximity of Hong Kong on a 99-year lease to expire in June 1997.

1911. The Wuhan Uprising in Canton overthrows the Chinese Empire and makes its leader, Dr. Sun Yat-sen, the first president of China.

1920. Around 9,000 Hong Kong mechanics go on strike and leave for Canton. The subsequent paralysis of commerce leads to a wage increase and the settlement of the labor dispute.

1921. The Hong Kong government has to accept a wage increase for seamen similar to the one given to the mechanics in 1922 to end a general workers' strike.

1926. In October, the long general strike of Hong Kong's workers, in which 30 percent of the workforce participates, ends when the British Foreign Office agrees to change some of its unequal economic treaties with China.

1937. The Sino-Japanese War begins. The Japanese navy lands at Bias Bay in the New Territories.

1939. Japanese military forces occupy Hong Kong's Hainan Island.

1941. On 8 December, Japan invades Hong Kong. Governor Young accepts defeat and surrenders to the Japanese commander on 25 December.

1949. The Chinese Communist Party wins the civil war in China and declares the establishment of the People's Republic of China (PRC) on 1 October.

1950s. Hong Kong's population increases to 2.5 million as a result of the flight of hundreds of thousands of refugees from mainland China.

1961. Hong Kong's population increases to 3.1 million.

1970. Hong Kong's population grows to 4 million.

1979. As part of improving ties between China and Britain, China invites Hong Kong governor MacLehose for an official visit to discuss certain issues, especially the expiration of the New Territories lease in 1997.

1980. Hong Kong's population increases to 5.2 million. Hong Kong governor MacLehose announces the "Touch Base" policy to stop illegal immigration from China, which provides for the return of illegal immigrants to China.

1982. In September, British prime minister Margaret Thatcher visits Beijing to begin negotiations about the future status of Hong Kong.

1983. In July, the first official round of Sino-British talks over the future status of Hong Kong begins. In October, the Hong Kong dollar is pegged to the U.S. dollar at a rate of HK7.8 against US$1.

1984. The British and Chinese governments sign the Sino-British Joint Declaration regarding the peaceful hand-over of Hong Kong to China on 1 July 1997.

1985. In September, the Hong Kong government holds the first elections for Hong Kong's legislative body, the Legco.

1990. China's National People's Congress passes the Basic Law to serve as its mini-constitution based on the principle of "one country, two systems."

1991. In June, the Bill of Rights of Hong Kong is enacted with the power to override all other laws.

1994. Hong Kong holds its first fully democratic elections, and pro-democracy parties win a majority in the Legco. Selecting from among Hong Kong nationals, China appoints a 150-strong Preparatory Committee to lead Hong Kong's transfer to China. Over half of the committee are from Hong Kong's business elite.

1996. In December, China selects a Hong Kong ty-coon, Tung Chee-hwa, to be Hong Kong's first chief executive after the 1997 hand-over.

1997. On 1 July, the British government returns Hong Kong to China, which is renamed as the Hong Kong Special Administrative Region (SAR) of the People's Republic of China. Its Basic Law guarantees legal, judicial, and legislative systems independent from those of China and full economic autonomy.

1998. Hong Kong signs a treaty with China to eliminate double taxation of their respective businesses operating in each other's territory. In May, a Legco is formed by elections, which replaces the Provisional Legislative Council (PLC).

2000. In September, a new Legco is formed by elections.

FUTURE TRENDS

Hong Kong has a very strong economic base, which has enabled it to tolerate periods of economic hardship. Its economic strength helped it survive the severe financial crisis of the late 1990s with minor damage, compared to the extensive devastation of many Asian economies. This strong economic base will help Hong Kong to regain its losses and expand its economy to play a more significant role in global markets. Hong Kong's access to China will make a large contribution to the expansion of its economy and will elevate its international status. The migration of the manufacturing industry to mainland China has weakened the local industrial base and created unemployment, but it has also opened a very promising economic opportunity for Hong Kong. China's abundance of land and raw materials and its low cost of labor have addressed the major limitations of the Hong Kong manufacturing sector. These limitations have prevented it from growing in light and consumer industries and from establishing labor-and land-intensive industries, including heavy industry. Mainland China has thus offered to Hong Kong an opportunity for industrial growth and expansion of exports of manufactures. It has also offered its huge 1.3-billion strong market, the world's largest, for investment and exports. This has put the Hong Kong economy well ahead of many other developed economies, which have been trying to gain extensive access to China. Hong Kong's manufacturing will surely expand, and its role in its economy will become more prominent, but the service sector will remain the largest and most dominant sector and the engine of growth. This is partly because of the strength and the phenomenal size of that sector, which have enabled it to grow and will ensure its continuity. It is also partly because of its crucial role in the re-export of goods produced in China, including their packaging, shipping, handling, and marketing, as well as financing their production.

Hong Kong's high-tech and IT industries have a great potential for growth. The territory's private sector has taken steps towards that end while its government has encouraged private initiatives. The high-tech and IT industries should have a stronger presence in international markets over the next few years, even though they face a challenge from the more developed industries of Taiwan, Singapore, and South Korea.

The service industry has absorbed most of the unemployed workers of the manufacturing sectors, but it has been unable to find jobs for a growing number of them. Given the continued migration of manufacturing industries to mainland China, the number of these unskilled or low-skilled middle-aged unemployed workers will continue to grow. Unless the Hong Kong government or the service sector retrains them to find jobs in emergent industries, most of them will become permanently unemployed. Their frustration will likely contribute to social and political disorder in Hong Kong, which has not experienced such phenomena in its contemporary history.

DEPENDENCIES

Hong Kong has no territories or colonies.

BIBLIOGRAPHY

Economist Intelligence Unit. Country Finance: Hong Kong, 2001. London: Economist Intelligence Unit, January 2000.

Economist Intelligence Unit. Country Profile: Hong Kong. London: The Economist Intelligence Unit, 2001.

International Labor Office. Yearbook of Labor Statistics 1999. Geneva, Switzerland: International Labor Organization, 1999.

International Monetary Fund. International Financial Statistics Yearbook. Washington, D.C.: International Monetary Fund, 1999.

Lonely Planet. Hong Kong. <http://www.lonelyplanet.com/destinations/north_east_asia/hong_kong/index.htm>. Accessed February 2001.

United Nations Development Project. Human Development Report 2000. New York: Oxford University Press, 2000.

U.S. Central Intelligence Agency. World Factbook 2000: Hong Kong (Special Administrative Region of China). <http://www.odci.gov/cia/publications/factbook/geos/er.html>. Accessed January 2001.

U.S. Department of State. 1999 Country Reports on Human Rights Practices: Hong Kong. <http://www.state.gov/www/global/human_rights/1999/eritrea.htm>. Accessed January 2001.

U.S. Department of State. FY 2000 Country Commercial Guide: Hong Kong. <http://www.state.gov/www/about_state/business/com_guides/index.html>. Accessed January 2001.

Welsh, Frank: A History of Hong Kong. London: Harper Collins, 1993.

The World Bank. The Emerging Asian Bond Market (Background Paper), Hong Kong. The World Bank East Asia & Pacific Region. Washington, D.C.: World Bank, June 1995.

Yan-Ki Ho, Richard, Robert Haney Scott, and Kie Ann Wong, editors. The Hong Kong Financial System. Hong Kong: Oxford University Press, 1991.

—Dr.Hooman Peimani

CAPITAL:

Hong Kong.

MONETARY UNIT:

Hong Kong dollar (HK$). One Hong Kong dollar is equal to 100 cents. There are coins of 10, 20, and 50 cents, and HK$1, 2, 5, and 10. Paper currency comes in denominations of HK$20, 50, 100, 500, and 1,000.

CHIEF EXPORTS:

Clothing, textiles, footwear, electrical appliances, watches and clocks, toys.

CHIEF IMPORTS:

Foodstuffs, transport equipment, raw materials, semi-manufactures, petroleum.

GROSS DOMESTIC PRODUCT:

US$158.2 billion (1999 est.).

BALANCE OF TRADE:

Exports: US$169.98 billion (including re-exports, 1999 est.). Imports: US$174.4 billion (1999 est.).

Hong Kong

History & Background

Hong Kong's 646 square miles (1,040 square kilometers) are mostly small, uninhabited islands. Ninety percent of the 7 million people live on about 97 square miles (156 square kilometers) of land—Hong Kong Island, Kowloon peninsula, and the New Territories. The Mongkok section of Kowloon has more than 250,000 people per square mile, making it the most crowded area in the world. About 98 percent of the people are Chinese, most of whom have roots in the Guangzhou area, about 84 miles northwest across the channel on China's mainland.

During the last three decades of the twentieth century, Hong Kong developed into one of the world's leading financial capitals. Hong Kong claims to be the world's eighth largest trading economy, the world's busiest container port, Asia's leading air cargo hub, and the financial and banking center of Asia. Even before its return to the People's Republic of China (PRC) on July 1, 1997, Hong Kong was China's leading trading partner; this relationship has continued to expand. By the opening of the twenty-first century, Hong Kong employed more than 3 million workers in China and was a major investor in the Chinese economy.

After it took control of Hong Kong in 1843, the British colonial government never made much effort to educate the Chinese beyond training clerks and servants. Missionaries, however, did establish schools early. St. Paul's College opened in 1849 to train Chinese to become teachers and clergy. During the remaining of the century, only a small number of Chinese children attended government-sponsored schools. Most attended either private Chinese schools or no school at all.

In 1887, the College of Medicine was founded and, in the early twentieth century, this became a part of the first university in Hong Kong. The colony, however, remained a minor economic extension of the British empire until the 1950s. The victory of communists on mainland China transformed the colony into a dynamic center of economic activity. By 1960, about 2 million refugees from the mainland had escaped to Hong Kong. Some were educated, wealthy business leaders, especially in industries such as textiles and shipbuilding, but the vast majority were poor, uneducated peasants. Living in cardboard shacks in refugee camps and on boats in Hong Kong harbor, the majority of refugees provided a huge pool of workers for basic industries that needed unskilled labor. By the 1970s, Hong Kong businesses were converting from low-skilled industries to electronics, banking, and international trade, which required some basic literacy.

As a result, in 1971 Hong Kong authorities passed the first law requiring compulsory education for children between the ages of 6 and 11. By 1980, free education was guaranteed for children through grade nine, or junior secondary school. Three types of schools were established: government-operated public schools, privately owned and operated but with government aid (aided schools), and privately owned and operated without government aid.

Following the British system, Hong Kong's secondary students (seventh grade) were placed in classes according to their tests scores. This "banding" separated students into academic (science and humanities) and vocational tracks. Band 1 consists of students scoring in the highest 20 percent, and Band 5 is made up of students with scores in the lowest 20 percent. Also taken from the British system was the 6-3-2-2 system: primary school is six years; junior secondary school is three years; senior secondary school is two years; and Form Six (preparation for university entry exams) is two years.

Before the 1980s, there were very few institutions of higher education. The oldest is the University of Hong Kong (HKU) founded in 1911, closely followed by the Chinese University of Hong Kong (CUHK), which was established in 1963. Several universities that existed earlier than the 1980s were originally postsecondary institutions, but not degree-granting university institutions.

In the 1960s about 15 percent of the population had completed senior secondary school. By 1991, the percentage had grown to 44 percent. Attendance at universities also experienced rapid growth, from 15,381 students in 1975 to 60,289 students in 1995. Even with the rapid expansion of education in the late 1990s, about 45 percent of the population aged 25 years and older had not received any secondary schooling.

Constitutional & Legal Foundation

Free and compulsory primary school education in Hong Kong began in 1971. By 1978 the government had expanded free education to children up to 15-years-old, covering primary and junior secondary school, grades one through nine. Then in the 1990s, the Hong Kong government analyzed the educational system and set down detailed plans for the twenty-first century. The Hong Kong Board of Education (BoE), which is a statutory advisory body of the Education Department (EdD), reported that "the aims of Hong Kong education were not made explicit until a formal document School Education in Hong Kong: A Statement of Aims was published by the Education and Manpower Branch (EMB) in 1993."

The EMB is the top governmental agency responsible for education and training. In addition to supervising policies, budgets, and programs, the EMB prepares reports and proposals for Hong Kong's ruling Legislative Council. Established in 1984, the EdD manages daily educational affairs. Its committees and subcommittees investigate, research, and propose policies to the EMB. Schools are evaluated regularly by the department's Advisory Inspectorate to make sure they are following official policies.

In 1992 the Curriculum Development Institute (CDI) was created as a wing of the EdD to develop curriculum for primary and secondary schools. Its major role is developing and supporting the transition to the new curriculum that stresses independent and analytical thinking skills; the use of new technology, including computers; the new ties with the mainland; and life-long learning skills. The CDI works closely with the Curriculum Development Council (CDC), which evaluates and proposes curriculum from the preprimary through secondary school levels. The CDC reports directly to the Chief Executive of Hong Kong.

Vocational and technical training fall under the responsibility of the Vocational Training Council (VTC), founded in 1982. This organization offers courses for technical and vocational careers. The VTC sponsors programs in a wide variety of occupations, from Chinese cuisine and hospitality to seaman and welding training.

The Hong Kong Examination Authority (HKEA) was created in 1975 to develop and administer a variety of examinations, ranging from testing for professional and commercial licenses to the two major secondary school city-wide examinations: The Hong Kong Certificate of Education (HKCEE) and the Hong Kong Advanced Level Examination (HKALE).

On December 19, 1984, the People's Republic of China (PRC) and Great Britain signed the Sino-British Joint Declaration of the Question of Hong Kong (Joint Declaration). China instituted the "One Country, Two Systems" policy. Article 5 states that "the socialist system and policies will not be practiced in the Hong Kong Special Administrative Region (HKSAR) and Hong Kong's previous capitalist system and life-style will remain unchanged for 50 years." The PRC further protected Hong Kong's educational system through the Basic Law, which went into effect on July 1, 1997, the date that Hong Kong was officially handed over to the PRC. Article 136 of the Basic Law guarantees that ". . .the Government of the Hong Kong Special Administrative Region shall, on its own, formulate policies on the development and improvement of education, including policies regarding the. . .examination system."

Educational System—Overview

In order to compete in international commerce, the government places a strong emphasis on education. When free, compulsory primary school education was initiated in 1971, only about 40 percent of the male population had six years of education. By 1999, that figure stood at 75 percent. The figures for females throughout the same period jumped from 35 to 60 percent.

Until 2000, Hong Kong authorities continued citywide examinations for placement into preferred schools from kindergarten through Sixth Form. Examination scores were used to stream students into the major fields of science, humanities, or vocational training. Examinations have also been used to determine which secondary schools students will attend. In 2000, Hong Kong began to switch away from using examination scores to stream and place students. The HKCEE in the final year of senior secondary school and the HKALE in the final year of Sixth Form remain critical examinations for all students hoping to continue their education.

The government subsidizes education at all levels. Primary and junior secondary school fees for students attending government or government-aided schools are paid completely by the government. At the senior secondary and tertiary levels, students must pay fees, but the government offers many grant and loan programs that help students with financing their education. In addition, the government funds most of the costs for students attending certain public-funded tertiary institutions. Annually, government spending ranges between 18 percent and 23 percent of its public spending budget.

Although preschool is not mandatory, 90 percent of all children aged four to six attend preschool. Kindergartens are privately owned and operated, but they must register with the government and follow strict guidelines. The competition for finding good schools begins at the primary level. Until 2000, students in primary grade six took examinations that determined where they attended junior secondary school; the placement scheme has recently been revised. More than 80 percent of those aged 12 to 14 enroll in junior secondary school.

Once students finish grade 9 or are 15-years-old, school attendance is no longer mandatory. The government, however, guarantees openings for 85 percent of junior secondary finishers who want to continue to senior secondary or another type of education. The government also has committed itself to guaranteeing subsidized openings for all students who want to continue their education either in senior secondary or vocational training schools beginning in the 2002-2003 academic year.

The two years at senior secondary school prepare students for a broad range of options, but the main goal is to prepare students for the HKCEE. In their second year (S5), they take the HKCEE to determine who gets into the limited number of places in Sixth Form schools for a two-year college preparatory program. About a third of the students who begin senior secondary school qualify for openings in Sixth Form. Only 18 percent of Sixth Form students can attend universities in Hong Kong because of the limited number of openings.

Some students go from primary six (P6) into technical secondary schools. These schools offer five-year programs, although after the first three years, students are no longer required to attend school. Many students in technical secondary schools take the HKCEE with hopes of scoring high enough to obtain a place in Sixth Form. A small percentage of students finish junior secondary school and decide to take vocational courses offered by the VTC that lead to a Certificate in Vocational Studies (CVS). This prepares them for a broad range of jobs.

Although mainly attended by expatriates' children, the international schools, often run by religious groups, are popular with the affluent Chinese population. These schools are very expensive, with fees ranging from $5,000 Hong Kong dollars (US$641.05 in March 2001) to HK$20,000 (US$2,564.20) a year. Because they emphasize problem-solving and creative thinking, many Chinese parents consider the education superior to public schools. In 2000, there was already a two-year waiting period for openings in the international schools.

Students with special needs have several options. In 1999-2000 there were 74 special education schools, including practical schools and skills opportunity schools. Hong Kong also has separate schools for the blind, the deaf, the physically handicapped, and a school for students with social adjustment problems. Some of these schools are residential. All of the special education schools provide nurses, social workers, educational psychologists, speech therapists, and other specialists. In 1999-2000, nearly 9,500 students were enrolled in special schools. The government offers testing, screening, and checklists for teachers to identify and serve students with special needs. From these tests, students are placed into regular schools if possible.

The institutions at the tertiary level consist of degree granting institutions, teacher training, and postsecondary training institutions. The government guarantees subsidized, first-year university places for 18 percent of 17-to 20-year-olds, approximately 14,500 students in 2000. In addition, the government guarantees subsidized openings in postsecondary training at technical institutions for 8 percent of this age group.

University education is not totally free, however, even at the public-funded institutions. Students do have to pay their tuition, which amounted to HK$5,500 in 2000 (US$705.16). Tuition fees account for about 20 percent of the total budget per student for universities. The remaining money comes from the government.

With the transfer of Hong Kong to the PRC, significant curriculum changes have been instituted in the primary and secondary school curriculum. New courses in civics and Putonghua (Mandarin) are being taught. The civics courses cover information on China and its culture, the basic law that governs Hong Kong, and the meaning of the "one country, two system" policy. Mandarin is the common spoken language of the majority of people in China. In the ideal situation, students will be fluent in their "mother tongue"—Cantonese, English, and Mandarin. All primary schools teach in Cantonese but, until the 1990s, secondary schools had used mostly English. Since 1997, the government has implemented the "mother-tongue" policy, requiring all but about 100 secondary schools to use Cantonese as their language of instruction.

A new government education policy instituted in the late 1990s addresses the critical issue of the thousands of newly arrived children (NAC) from mainland China. The policy is to provide 60 hours of orientation, including courses in Cantonese, Hong Kong life, and Hong Kong culture. The government hopes to integrate these children into the mainstream educational system as soon as possible. For this purpose, the government has organized and given grants to hundreds of schools to conduct programs for these children.

In the late 1990s, Hong Kong's first Chief Executive Tung Chee-wah began a public campaign to reform education in Hong Kong. He, and other officials, wanted to make sure the citizens of Hong Kong were prepared to compete in a world that required constant changing and updating of skills. One of Tung's major projects was to make schools at all levels more accountable to the people and government. To do this, he introduced School-Based Management (SBM). Tung and other education officials believed that many schools lacked strong management goals and assessment methods for growth and improvement. Since the late 1990s, Hong Kong has proposed many reforms. Some have remained in place, some have evolved into new plans, and some have been tabled for lack of public support.

Target-Oriented Curriculum (TOC) is one of the reforms being promoted. Begun in 1995, TOC was supposed to redirect the primary and secondary curriculum away from academic, teacher- and textbook-centered, and driven by competitive, norm-referenced examinations to a curriculum that will encourage "individualism and whole-person growth, child-centered and task-based learning, and criterion-referenced assessment." Three core subjects make up TOC: Chinese, English, and Mathematics. The vagueness and subjectivity of assessment standards and the extra time required to create and evaluate student activities, however, has caused some teachers to question TOC. The general idea, however, of focusing on skills in these three subjects continues to provide the foundation for Hong Kong education reform in the twenty-first century.

In line with the movement to encourage more creative thinking in the classroom, the government launched major reform in methods of assessing students. Since the mid-1990s, the trend is to replace rigid, competitive testing with more individual student assessment and guidance. The major assessment tool being used in the early twenty-first century is the Hong Kong Attainment Test (HKAT).

Preprimary & Primary Education

Nursery schools and kindergartens are privately owned, but they must register with the government and follow its regulations. In 1999-2000, some 756 kindergartens were registered and taught 171,138 students. The government provides financial assistance to needy families who cannot afford kindergarten fees. In 1999-2000, the Student Financial Assistance Agency (SFAA) received 72,436 applications for kindergarten fee remission. From this total, 65,128 received half fee remission and 3,741 received full fee remission. The pupil-teacher ratio in 1999-2000 was 12.6 children per teacher, but individual class sizes vary.

There were 819 primary schools with 491,181 students enrolled in 1999-2000. About 6 percent of these schools were operated entirely by the government, about 84 percent were operated by nonprofit groups that received government aid, and about 10 percent were privately owned and funded.

Most primary schools operate half day sessions. One group of children attends the morning sessions, and another group attends the afternoon sessions. The government plans to convert all primary schools to full-day schools in the future. In September 2000, about 39 percent of all primary students attended full-day schools. By the 2002-2003 school year, government plans call for 60 percent of the students to be in full-day primary schools and, by 2007-2008, all primary students should be attending full-day schools. The pupil-teacher ratio was 22.4:1 in 1999-2000, but class size is usually in the mid-thirties. The government has promoted a teaching method called "Activity Classes," a system that encourages student-centered learning. These classes are usually smaller than normal classes.

Before 2000, parents competed to get their children into prestigious primary schools, even if those schools were outside their "NET" (Hong Kong is divided into 58 primary school NETS or home districts). Parents often moved, rented, or even cheated to get their children into one of the higher rated schools. The government began a new policy in 2000 for the Primary One Admission (POA) System that restricts the competition for primary school openings. Parents are allowed to apply to any school anywhere but are only guaranteed places in their home district. There are two stages of selection. In the first, each primary school selects 65 percent of its entering primary one students from applications, but 30 percent of these must come from their district. Those children still waiting for placement are then assigned by the government to schools within their home districts.

For decades Hong Kong education officials have proposed different plans to assess student learning and to evaluate each school's performance. One was the Academic Aptitude Test (AAT), put into place in 1978. It measured verbal and numerical reasoning in Chinese and consisted entirely of multiple choice questions. In the 1990s it came under increased criticism for not measuring higher order thinking skills and for not testing more of the actual subjects from the curriculum. It was also used to compare each school's relative success at educating students. As of September 2000, the AAT was abolished. Authorities are attempting to devise tests that will allow them to assess student competency, individual school performance compared to other schools, and the city-wide school system as whole. In the meantime, a temporary three-part method will be used that combines the school's average AAT results from 1997-2000, each student's grades, and parents' preferences.

Besides the core subjects of Chinese, English, and mathematics, primary schools teach courses in general studies, including sciences and health; civics; music and art; physical education; English; and Mandarin. Instruction in computer use is also being added to the curriculum.

Although Cantonese is the language of instruction, English is taught in every primary grade. Overall, each student receives between 180 and 210 hours per year in English instruction.

Secondary Education

Hong Kong's secondary schools are operated by three separate groups: the government (about 8 percent of students); voluntary groups largely funded by the government (about 77 percent of students); and private schools that raise their own finances (about 15 percent of students). Secondary education is divided into three years of junior secondary (S1-S3) and two years of senior secondary (S4-S5) school. Senior secondary students take the HKCEE, and about 30 percent usually score high enough to qualify for places in Sixth Form (Secondary Sixth or S6-S7), a two-year program that prepares students to take the university qualifying exam (HKALE).

There are three types of secondary schools: grammar, which concentrates on academic subjects; technical/ vocational, which prepares students to enter the workforce after their ninth year but also offers academic preparation if students wish to continue their education; and prevocational/special schools, which are for students with disabilities. In 1999-2000, there were 433 grammar, 20 technical, and 27 prevocational schools, with more than 450,000 students: 235,974 in S1-S3; 159,343 in S4-S5; and 58,248 in S6-S7. Although the pupil-teacher ratio is about 19 to 1, class size in 1998-1999 averaged in the upper thirties, not much lower than in 1985-1986, when there were slightly fewer than 40 students per class.

Where students attend school has always been a controversial issue. Certain secondary schools established superior reputations, and parents competed to place their children in these schools. Until 1978, the availability of openings in secondary schools was limited, so students had to take a competitive exam called the Secondary School Entrance Examination (SSEE) to get into S1. After 1978, the government guaranteed a subsidized place for everyone through S3 or the age of 15. Therefore, the SSEE was not needed and it was eliminated. To determine which junior secondary school students attended, the Secondary School Places Allocation (SSPA) was introduced. Under the SSPA, there was no competitive examination. Allocation was based on a student's academic record, the Academic Aptitude Test (AAT) used to weigh the academic standards at each school, parental choice of secondary schools, and school NETS or districts.

In the late 1990s, the Education Commission began an extensive review of the SSPA system and eliminated the ATT. In 2001 they began looking at alternative plans, but the interim system is similar to the former SSPA except with less dependence on public examination scores. The end result is that most students must attend secondary schools in their own secondary school NET. The government has encouraged primary and secondary schools to link together in a system called "Through Train" so that students will pass directly from P6 (sixth year of primary school) to specified junior secondary schools for S1. The commission plans to have a new system in place by 2004 or 2005.

Gaining a place in senior secondary schools is also competitive. Because there were limited places in senior secondary schools, the government created the Junior Secondary Education Assessment (JSEA) in 1980. In 1993, the present system called Secondary Four Places (SFP) was adopted. It combines student performance in school with a formula called Mean Eligibility Rate (MER), which determines the success of each junior secondary school in placing students in S4.

The government subsidizes places for 85 percent of the S3 leavers in grammar and technical schools and another 10 percent for places in vocational subsidized schools. In 1999, approximately 78,000 students finished S3. Almost all of them sought further education. In addition, a few thousand former S3 finishers sought some form of post S3 education. The government offered subsidized places for 73,749 students. Courses taught by other agencies and subsidized by the Department of Education covered 2,240 more students. The Vocational Training Council (VTC) subsidized 4,192 full time openings in vocational and industrial training, including study with the Construction Industry Training Authority and the Clothing Industry Training Authority. Other programs with private schools took 3,498 students in 1999. So in effect, almost everyone who wanted to continue schooling beyond junior secondary had the opportunity.

There are few expenses for students attending junior secondary school other than transportation, books, and uniforms. The government Student Financial Assistance Agency (SFAA) offers textbook assistance for needy families. Students attending senior secondary school, however, must pay an annual fee. For the academic year 2000-2001, this amounted to HK$5,050 (US$647.48). For Sixth Form the fee was HK$8,750 (US$1,121.80).

The SFAA provides fee remission and other assistance for needy S4-S7 students from families with average monthly incomes of under HK$23,200 (US$2,974.37). In 2001, the government promised that subsidized S4 places would be available in the future for everyone who wanted to further his or her education beyond the required nine years.

Getting into senior secondary school puts students on track to take the HKCEE and qualify for Sixth Form, but openings are limited. There were 23,956 guaranteed places in S6 for the 1999-2000 academic year. In recent years the percentage of students going on to post S5 study has been around 33 percent. Many of those who take the HKCEE are not associated with a school; they are retaking the exam to try to increase their scores. In 2000, of the 130,303 examinees, 41,267 were private candidates.

To prepare students for the HKCEE, senior secondary schools dedicate about 50 percent of the curriculum to the three core subjects: Chinese, English, and mathematics. In all, the HKCEE covers 42 subjects, and most students choose 7 or 8 for examination. Chinese, English, and mathematics must be taken by all students, then students select either humanities exams in subjects such as world history, Chinese history, geography, and economics; or science exams in subjects such as physics, chemistry, biology, and additional mathematics. The tests are scored on an A through F basis: A, 5 points; B, 4 points; C, 3 points; D, 2 points; E, 1 point; and F, not passing. The best six grades are counted, and they must total 14 or higher if a student hopes for a place at a subsidized Sixth Form. HKCEE scores are also used in the workforce for mid-level hiring. To get a civil service position as a clerical officer, for example, an applicant must have five grade Es, two of which must be in Chinese and English languages.

Annually, from 60 to 68 percent of the exams are scored E or above. In 2000, the four most popular subjects were Chinese language with 78,975 examinees (66.0 percent scored E or higher); mathematics with 78,658 (74.7 percent scored E or higher); additional math with 21,479 (84.6 percent scored E or higher); English language with 66,064 (64.6 percent scored E or higher); and economics with 38,494 examinees (68.4 percent scored E or higher).

To qualify for university level education, students must take the HKALE. Most students take the exam in the late spring during their second year of Sixth Form. To be eligible to take the HKALE, students must have a grade of E or above in six HKCEE subjects, two of which must be Chinese and English. Because more than 25 percent of those who take the HKALE annually are no longer students, they are classified as private candidates. To be eligible for the exam, private candidates must meet one of three criteria: (1) have taken the HKCEE 18 months before the HKALE examination; scored a grade of E or above in six subjects, including Chinese and English; have a C or above in at least one subject; and a point total from the exams of at least 10 (using the same A through F point system as the HKCEE); (2) have taken the HKALE before; or (3) be 21-years-old by January 1 of the year of the examination.

In 2000, some 35,549 students sat for the exams, 75.7 percent for the first time. Of this total, 16,868 (48.7 percent) scored high enough to qualify for admission to tertiary institutions: 7,586 males (47.1 percent) and 9,282 females (50 percent). Only about 14,500 government subsidized openings were available, however. This shortage of places leads many students to study overseas. The Hong Kong government estimated that in the late 1990s, a total of about 40,000 Hong Kong university students were studying overseas. The most popular countries were the United States (13,000 students), the United Kingdom (10,000), Australia (9,000), and Canada (6,500). Another 2,000 studied in other places such as Mainland China and Taiwan.

The HKALE tests subjects at two levels: 20 subjects at the A or advanced level and 20 subjects at the AS or advanced supplementary level. Both require two years of study, but the AS courses are half the classroom time as the A level courses. Universities consider two AS exams to be equal to one A-level exam when figuring scores on the HKALE. AS subjects were introduced in 1994 as a part of the government's attempt to encourage students to study outside the narrow course offerings in their majors.

Prior to 1994, the only mandatory language exam on the HKALE was English. Following the government's initiative, tertiary institutions began requiring a passing grade in both English and Chinese on the HKALE as prerequisite for acceptance. However, except for the AS-level English and Chinese exams, AS-level subjects have not become popular. In general, students take examinations that will enable them to meet entry requirements into specific university programs. As a result, more than 50 percent of the students never take AS level exams except in language.

To enter universities, candidates must score a grade of E or above in both "Use of English" and "Chinese Language and Culture," and a minimum of two more A-level or one A-level plus two AS-level subjects. Particular university programs might require additional requirements.

Instead of university study, thousands of students enter technical and prevocational secondary schools. The prevocational schools concentrate more on crafts for industry at the lower range of difficulty, while the technical schools offer three years of courses that also prepare students for possible senior secondary school. Therefore, the first three years in technical secondary schools include concentrations in academic subjects similar to grammar schools. A few technical schools offer S4 and S5 level courses that prepare students for the HKCEE. Technical openings go unfilled, however. In the late 1990s, only half of the 10 percent of subsidized openings were being filled.

Higher Education

Higher education generally covers two major types of institutions: degree-granting and technical/vocational education (postsecondary). Both are under the general supervision of the University Grants Council (UGC). The UGC fully subsidizes eight institutions offering bachelor's degrees. These include City University of Hong Kong (City U), Hong Kong Baptist University (HKBU or Baptist University), Lingnan University (LU), Chinese University of Hong Kong (CUHK), Hong Kong Polytechnic University (Poly U), Hong Kong University of Science and Technology (HKUST), University of Hong Kong (HKU), and most recently Hong Kong Institute of Education (HKIEd).

The oldest university in Hong Kong is the University of Hong Kong, formed in 1912 when the Medical College (founded in 1887) joined with the new Technical Institute. In recent decades, HKU has established itself as a major research institution with international acclaim. The next development came 50 years later, in 1963, when three colleges joined to form the Chinese University of Hong Kong, which also has developed into a highly respected teaching and research university. CUHK is home of the other medical school in Hong Kong.

In the 1970s and 1980s, several new higher educational institutions opened. Hong Kong Baptist University, which offers university degrees through the doctoral level, opened as Baptist College in 1970. Today, Baptist University has no formal affiliation with the church. In 1978, a branch of Guangzhou's Lingnan University opened with a strong emphasis on the liberal arts. LU has expanded into programs offering a Master of Philosophy and Doctor of Philosophy in Chinese, cultural studies, English, philosophy, translation, business, and social sciences. Hong Kong Polytechnic University began in 1972 as Hong Kong Polytechnic and became a fully-accredited university in 1994. In 1984, City University of Hong Kong began as City Polytechnic. It also was fully accredited in 1994. The Hong Kong Academy for Performing Arts (APA) started up in 1984 and, in the late 1990s, began offering first degree level programs, in addition to advanced diplomas and certificates in the fine arts (dance, drama, music, and technical arts). It has about 700 full-time students. In 1989, the Open University of Hong Kong (OUHK) began as the Open Learning Institute, and in 1996 OUHK became accredited as a university. OUHK offers university degrees, but it is funded independently, mostly from student fees. It is Hong Kong's major institution offering distance learning. Half of OUHK's 18,000 students are between 26- and 35-years-old, and most of these students attend part time.

The Hong Kong University of Science and Technology (HKUST) opened in 1991 and immediately offered university and graduate level courses. In 1994, the Hong Kong Institute of Education was formed from four colleges of education. At first it offered professional certificates and training, but in 1997, HKIEd became fully funded by the government under the sponsorship of the University Grants Committee; in the following year, HKIEd offered its first degree programs.

Most bachelor's degree programs take three years. Unlike programs in the United States, Hong Kong university degree programs focus on a single major and closely related subjects, rather than requiring a broad range of core courses across disciplines. There is a strong movement to change to the broader-based education system used by U.S. universities, which would require most Hong Kong universities to restructure course requirements.

Business and related fields are the most popular university degree subjects. In 1999-2000, business and management accounted for 23 percent of the majors in UGC funded institutions. Almost a third of these were studying accounting. About 16 percent studied science and mathematics, and another 19 percent chose engineering as their major field. Other popular majors include economics, medicine, and computer science.

In an attempt to expand their resources and international reputation, several universities have formed partnerships with universities overseas and on the China mainland. For example, Poly U has ties with Tianjin Medical University and Peking Union Medical College for teaching health science research. Baptist University offers a long-distance MBA degree program jointly with Scotland's University of Strathclyde.

A number of private institutions provide education at the tertiary level. They are self-supporting, so they depend on private funding. One is Caritas Francis Hsu College (CFHC) which targets people who are mainly working in the commercial fields and want to continue their formal education. In coordination with universities in Great Britain and Australia, Francis Hsu College's Centre for Advanced and Professional Studies (CAPS) offers bachelor and master programs in a variety of fields, including accounting, business management, and hospitality management.

Higher vocational and technical education in the nongovernment sponsored schools must register with the government under the Post Secondary College Ordinance. Currently, only Shue Yan College (SYC) is registered. Opened in 1976, SYC offers four-year secondary diploma courses and a few first degree and masters programs. SYC has ties to universities in China and overseas.

The other type of postsecondary education consists of institutions that provide technical and vocational courses, called sub-degree levels. These programs tend to be vocational, more specifically targeted to teaching work-related skills. They are not equivalent to a bachelors degree from a university. Typically, candidates need passing scores on at least five HKCEEs to qualify for sub-degree programs. Upon completion of these programs, students receive a higher certificate, a diploma, or higher diploma. As a rule, these students usually attend part time since they normally work full time. The length of study ranges from two to four years. A variety of these programs are offered through several colleges and universities, including Poly U, APA, HKIEd, City U, OUHK, and the Hong Kong Institute of Vocational Education (IVE).

The major government sponsor of technical and vocational training is the Vocational Training Council (VTC), founded in 1982, which offers programs through its IVE. Although officially these are not classified as secondary education, they do include some senior secondary courses that help prepare some students for the HKCEE. IVE has nine different institutes around Hong Kong that teach a wide range of vocational courses in coordination with industry, from commerce to textiles. In 1999-2000, some 54,781 full- and part-time students studied with IVE. Some of the curriculum is designed for higher level technical positions in industry and commerce. Upon completion, students receive certificates and associate degrees.

Students must pay for their higher education. For needy students attending the University Grants Council (UGC) subsidized institutions, financial assistance is available from government grants and loans. Besides the eight universities listed earlier, other subsidized institutions are IVE, APA, and Prince Philip Dental Hospital. In 1999-2000, the UGC processed 32,085 applications and offered assistance to almost all applicants. In many cases, students received a combination of grants and loans to cover their higher education expenses. The average amount offered was HK$47,223 (US$6,054.60).

In the early 1980s, total enrollment in UGC funded tertiary institutions for full time, first degree students numbered 2,000 and 3,000, or approximately 3 to 4 percent of the 17- to 20-year-old population. Then Hong Kong authorities began to build more institutions of higher education. The percentage of the 17- to 20-year-old population entering as full time, first degree students more than doubled between 1984 and 1990, to more than 9 percent, or approximately 7,000 full-time students. From 1991 to 1997, full-time students increased by 32 percent in UGC funded institutions (46 percent if the VTC technical colleges are included). By the late 1990s, there were approximately 14,500 (about 19 percent) of 17- to 20-year-olds entering UGC funded bachelor degree level institutions full time each year. The total enrollment at all levels for full-time students at UGC institutions in 1999-2000 was 69,948 students. The total enrollment for all of the 11 major tertiary institutions was 112,473 students. Another 150,000 people were taking some kind of continuing training and education.

Administration, Finance, & Educational Research

For the 2000-2001 fiscal year, Hong Kong's government expenditure on education was approximately HK$54.4 billion (US$7 billion). This total was 22.3 percent of the total government expenditure, an increase over previous annual budgets. The total was divided fairly evenly among primary, secondary, and tertiary levels. The agency responsible for education throughout Hong Kong is the Education and Manpower Bureau (EMB). The Education Commission (EC), however, carries out much of the daily planning, developing, and monitoring of all the schools. The EC is composed of 19 members, most of whom are appointed from the field of education, not government officials.

The UGC oversees the distribution of government money to tertiary institutions. Much of this money is allocated as a triennial block grant to each of the eight public funded institutions, and these institutions determine how to spend the money to provide the best educational services for their students. The UGC committee is made up of members appointed by Hong Kong's chief executive from outside the government, including representatives from the business and academic communities. Their mission is two-fold: one is to protect the academic freedom and independence of the institutions that they fund, and the other is ensure that the government's money is used effectively for the benefit of the people.

High quality research in Hong Kong universities is a relatively new activity. Until the mid-1990s, the government was mainly concerned with expanding educational opportunities. Since that time, however, Hong Kong educators have worked toward international respectability in research. The government's Research Grants Council (RGC), a subsidiary of the UGC, has four subject area panels that evaluate research proposals and recommend grants for research to academic staff members at UGC funded institutions. The subject areas are physical sciences, engineering, biology and medicine, and humanities and social sciences. Members of the panels are independent of government. Most are academics from Hong Kong and overseas institutions, while some are from nonacademic sectors of Hong Kong.

The VTC is made up of 22 members, 4 of whom come from government. The remaining are appointed from industry, business, and universities. VTC's main function is to advise government on the manpower requirements in Hong Kong, especially as it pertains to future development. Through its 20 Training Boards—covering areas such as accounting, banking and finance, hotel, catering and tourism, maritime services, textile and clothing, apprenticeship and trade testing, and disability training—the VTC offers training and skill upgrading to tens of thousands of workers annually. VTC also operates two technical colleges that offer diploma and higher certificate courses.

Nonformal Education

In the late 1990s, Hong Kong's government made a strong commitment to promoting "life-long learning" skills. The rationale behind this movement is that people in the fast-pace changing world of the twenty-first century must be prepared to learn new skills throughout their lifetime. One type of learning involves professional and career upgrading. Another involves knowledge for improving lifestyle so that people can appreciate the arts or pursue new hobbies.

Hong Kong has extensive continuing and professional education (CPE) programs. In the UGC supported institutions alone, continuing studies has grown from about 20,000 students in 1970 to more than 160,000 in 1996. In 1997, the 20- to 64-year-old age group in Hong Kong was estimated to be 4,214,300 people. From this group alone, the number of people taking some form of continuing education was 872,360 (even higher if the under 20 working group was included). Among the institutions with large CPE enrollments are HKU (School of Professional and Continuing Education), CUHK (the School of Continuing Studies), City U, Poly U (Centre for Professional and Continuing Education and the Centre for Professional & Business English), HKBU (School of Continuing Education), HKIEd, and the OUHK.

Several other agencies offer different forms of CPE, including the Caritas Adult and Higher Education Service at Caritas Francis Hsu College, the Hong Kong Management Association, the Hong Kong College of Technology through its Information Service Centre of Professional Studies (ISCOPS), and dozens of private firms and government departments.

Teaching Profession

Qualifications to teach in Hong Kong schools vary according to the level of teaching. Until September 2001, the minimum qualification to teach kindergarten was completion of S5 with two or more passes on the HKCEE, one of which had to be in either Chinese language or Chinese literature. In September 2001, the minimum number of passes was raised to five, including both Chinese and English languages. In 1999-2000, about 54 percent of the 8,855 kindergarten teachers were qualified kindergarten trained (QKT) and another 19 percent were in training. A person must take 360 hours of in-service training offered by the HKIEd to receive the QKT endorsement.

Only about 15 percent of primary teachers held university degrees in 1999-2000, but the vast majority had received professional teacher training. By 2004-2005 all the teaching programs at HKIEd will offer the Certificate of Education (CEd) university degree. Students with the HKCEE can enter HKIEd and take a three-year program leading to the CEd, the general qualification for teaching in primary schools in the future. Students who possess the HKAL can take a two-year program to get the CEd. Secondary school teachers are also trained at the HKIEd for their CEd. Those with degrees from a university but without teacher training take a year-long postgraduate course at HKIEd, UHK, CUHK, or BU to qualify for a postgraduate certificate in education. In 1999-2000, of a total of 24,453 secondary school teachers, 72 percent were graduates with degrees, while another 10 percent had special teacher training.

The HKIEd was created in 1994 by statute that combined Northcote College of Education, Grantham College of Education, Sir Robert Black College of Education, the Hong Kong Technical Teachers' College, and the Institute of Language in Education. In 1997, HKIE became fully funded by the government under the sponsorship of the UGC. Besides the CEd, HKIEd offers a Postgraduate Diploma in Education (PGDE) and Bachelor of Education for primary teachers. By 1999-2000 HKIEd was offering more than 50 courses and had nearly 10,000 students. HKIEd also has added a School of Creative Arts, a School of Sciences and Technology, a School of Early Childhood Education, a School of Languages in Education, and a School of Foundations in Education.

Masters- and doctoral-level degrees are prerequisites for most full time, university teaching positions. Like universities in the West, graduate level students also teach. To encourage postgraduate research in all fields, the government is increasing its positions for postgraduate research by 11 percent each academic year between 2001 and 2004.

The Hong Kong Professional Teachers Union (PTU) represents more than 60,000 teachers, or 90 percent of all teachers from kindergarten through university. It is active in all aspects of education, including protecting academic freedom, offering teacher workshops, publishing newsletters to keep teachers informed. In addition, the PTU sponsors services such as a cooperative supermarket, an optometric center, a dental center, and health project medical center.

Salaries for teachers vary greatly from primary to university level. In 1999, a full time academic professor near the top of the pay scale made about US$190,000 annually. A senior lecturer/reader with several years experience makes around US$125,000. The pay for an assistant lecturer/lecturer varies from US$50,000 to US$120,000. Primary and secondary school teachers with several years experience average around US$42,000 annually, but the scale varies considerably with experience. A teacher/administrator/coordinator position pays more, as much as US$60,000 annually. In 2000, the government was recruiting secondary school teachers for its native English-speaking teacher scheme (NET) for salaries ranging from US$26,000 to more than US$70,000, depending on qualifications. All of these full-time positions offer health and retirement benefits.

Summary

The most prominent feature in Hong Kong life and culture is the tension between the people's traditional Chinese respect for authority and conformity, and their need for more flexible and creative problem-solving skills. The two potential changes most often debated are eliminating the total reliance on citywide, standardized examinations for placing students and switching to a more open curriculum that resembles the American model of education, with its broad span of offerings. The government has taken steps to open up the curriculum, but moving to the American 6-3-3-4 system of education (6 years of primary, 3 of junior high, 3 of senior high, and 4 of university) and abolishing "banding" in secondary schools is running into opposition.

Another major reform movement in Hong Kong's educational system involves languages. Hong Kong has begun an intensive campaign to promote "biliterate and trilingual" skills in the curriculum. The first change has been to require most public schools to use Cantonese as the teaching language in primary and secondary schools. Officials believe that students are more comfortable learners when they are taught in their native language. With Hong Kong's heritage of English as the language of commerce, however, educators realize that they have the opportunity to retain and increase the numbers and quality of English speakers so that Hong Kong will remain a center of international finance and trade. To accomplish this goal, the government initiated the NET scheme to recruit 750 native English teacher/coordinators (NETs) for the public schools by the early years of the twenty-first century. The government provides extra funding for schools who hire NETs. The third language requirement comes with the handover of Hong Kong to the People's Republic of China. Mandarin, the language spoken in most of China, is a Chinese dialect not understood by most people in Hong Kong. All the schools now teach Mandarin as a standard course.

The reform that is succeeding with little opposition is the campaign to extend education and use of information technology (IT) from primary schools through universities. As a city without any natural resources, Hong Kong's success is tied to its people's ability to gather and manage information.

The Secretary for Education and Manpower Branch reported that by May 2001 all public supported schools would have computers, and the plan is to supply each primary school with 40 computers and each secondary school with 82 computers. In addition, all secondary and almost all primary schools had Internet access by the spring of 2001. Ultimately, the government wants all publicly supported schools to teach 25 percent of their curriculum through the Internet. To accomplish this, the government has instituted a comprehensive training program for all teachers. By late 2000, 75 percent of the teachers had finished basic information technology training (IT). The goal is to have 75 percent of all teachers trained at the intermediate level by 2002-2003. Another prominent feature of the IT crusade is the online learning tool for public schools and life-long learning projects called Hong Kong Education City. In the spring of 2001, the e-class site listed 294 science courses, 146 language courses, 123 art/music/physical education/vocational/library courses, and 117 social studies courses for students.

Bibliography

Bray, M. "Hong Kong: System of Education." The International Encyclopedia of Education. Vol. 5, 2nd ed. Torsten Husen and T. Neville Postlewaite, eds. New York: Elsevier Science Ltd., 1994.

Board of Education. "Report on Review of 9-year Compulsory October 1997 Education (Revised Version)," October 1997. Hong Kong Special Administrative Region [HKSAR]. Available from http://www.info.gov.hk/emb/eng/public/rep_table.html.

The Central Intelligence Agency (CIA). The World Factbook 2000. Directorate of Intelligence, 1 January 2000. Available from http://www.cia.gov/.

Chee-Cheong, Choi. "Public Examinations in Hong Kong." Assessment in Education: Principles, Policy & Practice, no. 3, November 1999. Available from http:ehostvgw1.epnet.com.

Cheung, Michael. "Spotlight on Hong Kong: Reading, Writing, and Rote Learning. . .Drive Students to Western Schools." Business Week International Editions, 14 August 2000. Available http://www.businessweek.com/.

Education Commission. HKSAR, March 2001. Available from http://www.e-c.edu.hk/eng/main.html.

Education Department. HKSAR, March 2001. Available from http://www.ed.gov.hk/ednewhp/text_sitemap_link.htm.

Hong Kong Examinations Authority. HKSAR, March 2001. Available from http://www.hkea.edu.hk/.

"Recruiting Students in Asia: Hong Kong: Local and International Education," March 2001. Available from http://home.school.net.hk/üiie/hked/hkeducation.htm.

—John A. Zurlo

Hong Kong

Compiled from the September 2006 Background Note and supplemented with additional information from the State Department and the editors of this volume. See the introduction to this set for explanatory notes.

Official Name:
Hong Kong Special Administrative Region

PROFILE

PEOPLE

HISTORY

GOVERNMENT

POLITICAL CONDITIONS

ECONOMY

FOREIGN RELATIONS

U.S.-HONG KONG RELATIONS

TRAVEL

PROFILE

Geography

Area: 1,100 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: (2004) 6.9 million.

Population growth rate: (2004) 1.0%.

Ethnic groups: Chinese 95%; other 5%.

Religions: About 43% participate in some form of religious practice. Christian, about 9.6%.

Languages: Cantonese (a dialect of Chinese) and English are official.

Education: Literacy—92% (95% male, 88% female).

Health: (2004) Infant mortality rate—2.7/1,000. Life expectancy—81.9 yrs. (overall); 79.0 yrs. males, 84.7 yrs. females.

Work force: (2004) 3.5 million. Wholesale, retail, and import/export trades and restaurants and hotels—28.4%; finance, insurance, real estate, and business services—12.7%; manufacturing—4.7%.

Government

Type: Special Administrative Region (SAR) of China, with its own constitution (the Basic Law).

Government branches: Executive—Administration —Next Chief Executive Selection in March 2007), Executive Council, serving in an advisory role for the Chief Executive. Legislative—Legislative Council elected in September 2004. Judicial—Court of Final Appeal is highest court, other lower courts.

Political subdivisions: Hong Kong, Kowloon, New Territories.

Suffrage: Permanent residents, at 18 years or over, living in Hong Kong for the past 7 years are eligible to vote.

Economy (2004)

GDP: (2004) $165.5 billion.

GDP real growth rate: (2004) 8.2%.

Per capita GDP: (2004) $24,045.

Natural resources: Outstanding deepwater harbor.

Industry: Types—textiles, clothing, electronics, plastics, toys, watches, clocks.

Trade: Exports—$259 billion: clothing, electronics, textiles, watches and clocks, office machinery. Imports—$271 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 6.9 million by 2004. Hong Kong is one of the most densely populated areas in the world, with an overall density of some 6,380 people per square kilometer. Cantonese, the official Chinese language in Hong Kong, 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 freely in Hong Kong. All children are required by law to be in fulltime 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 fulltime 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. 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 Sung 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 also were 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 fled from China to Hong Kong. Hong Kong became an economic success and a manufacturing, commercial, finance, and tourism center. High life expectancy, literacy, per capita income, and other socioeconomic measures attest to Hong Kong’s achievements over the last five decades.

GOVERNMENT

The Hong Kong Special Administrative Region (SAR) is headed by Chief Executive Donald Tsang, who officially took office on June 21, 2005 after China’s State Council announced its approval. Former Chief Executive Tung Chee Hwa tendered his resignation on March 12, 2005, citing ill health. Mr. Tung has since been confirmed as a vice-chairman of the National People’s Political Consultative Conference. The selection process for a new Chief Executive concluded on June 15, 2005 when Tsang garnered 710 of the 800 nomination votes from the Election Committee, preventing any other candidate from garnering the minimum 100 votes needed to become an official candidate. Although pro-democratic groups argued for a full five-year term for the new Chief Executive, as outlined in the Basic Law, Mr. Tsang will simply complete the remaining two years in Mr. Tung’s term. Mr. Tung was the first Chief Executive of Hong Kong and began his second five-year term on July 1, 2002, after his nomination by a selection committee established by the Basic Law. The selection committee is made up of 800 Hong Kong residents from four constituency groups: commercial, industrial, and financial interests; professionals; labor, social services, and religious interests; and the legislature, the Chinese People’s Political Consultative Conference, and the P.R.C. National People’s Congress. The 2004 Legislative Council elections were seen as generally free, open, and widely contested, though there were allegations of voter intimidation. The Hong Kong Government and the Legislative Council are currently engaged in a public consultation process intended to lead to changes in the mechanism for choosing the Chief Executive and forming the Legislative Council and move toward the “ultimate aim” of universal suffrage as prescribed by the Basic Law. In April 2004, the P.R.C. National People’s Congress Standing Committee issued a decision on the scope and pace of constitutional reform, which laid out certain conditions for the process of democratic development. This decision precluded major changes to the electoral systems for the 2007 Chief Executive and 2008 Legislative Council elections. In December 2005 the Legislative Council rejected a Hong Kong Government-proposed package of incremental reforms to the mechanisms for choosing the Chief Executive in 2007 and forming the Legislative Council in 2008. The Hong Kong Government also implemented the Principal Officials Accountability System in July 2002, which was designed to make the government more responsive to public concerns. Eleven political appointees, directly responsible to the Chief Executive, to run the 11 policy bureaus were added. Three other senior civil service positions—the Chief Secretary, Financial Secretary, and Justice Secretary—also were converted to political appointments, although without a change in personnel.

Principal Government Officials

Last Updated: 1/18/2007

Chief Executive: Donald TSANG Yamkuen

Chief Secretary for Administration: Rafael HUI Si-yan

Sec. for Civil Service: Denise YUE Chong-yee

Sec. for Commerce, Industry, & Technology: Joseph W. P. WONG

Sec. for Constitutional Affairs: Stephen LAM

Sec. for Economic Development & Labor: Stephen IP

Sec. for Education & Manpower: Arthur LI

Sec. for Environment, Transport, & Works: Sarah LIAO, Dr.

Sec. for Finance: Henry TANG

Sec. for Financial Services & the Treasury: Frederick MA

Sec. for Health, Welfare, & Food: York CHOW

Sec. for Home Affairs: Patrick HO, Dr.

Sec. for Housing, Planning, & Lands: Michael M. Y. SUEN

Sec. for Justice: WONG Yan Lung

Sec. for Security: Ambrose Siu-kwong LEE

Chief Executive, Hong Kong Monetary Authority: Joseph YAM

Chief Justice: Andrew LI Pres., Legislative Council: Rita FAN

Commissioner, Independent Commission Against Corruption: Fanny LAW

Director of Audit: Benjamin TANG

POLITICAL CONDITIONS

On July 1, 1997, China resumed the exercise of sovereignty over Hong Kong, ending more than 150 years of British colonial rule. 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 will retain its political, economic, and judicial systems and unique way of life for 50 years after reversion and will continue to participate in international agreements and organizations under the name, “Hong Kong, China.” In the past year and a half, China has taken on a more active role in overseeing the Hong Kong Government’s management of political developments in the Special Administrative Region. While Hong Kong remains a free and open society where human rights are respected, courts are independent, and there is well-established respect for the rule of law, Hong Kong groups have alleged manipulation or pressure in connection with the September 12, 2004 Legislative Council election. The Hong Kong Government has promised to investigate thoroughly all such allegations. On June 21, 2005, Chief Executive Donald Tsang was sworn in to complete the remaining two years of former Chief Executive Tung Chee Hwa’s term. Tsang won 710 of the 800 nomination votes from the Election Committee. As a result, no other candidate was able to garner the minimum 100 votes needed to become eligible to run for Chief Executive.

ECONOMY

Hong Kong is one of the world’s most open and dynamic economies. Hong Kong per capita GDP is comparable to other developed countries. Real GDP expanded by 8.2% in 2004 year-on-year, driven by thriving exports, vibrant inbound tourism and strong pick up of consumer spending. While severe acute respiratory syndrome (SARS) caused the Hong Kong economy to shrink during the first half of 2003, second quarter real GDP expanded by 3.2% year-on-year. Hong Kong experienced deflation from November 1998 until July 2004, when inflation reappeared at a 0.9% rate, measured year-on-year. A slack property market has also contributed significantly to deflation. By mid-2003, property prices had fallen 66% from their late 1997 peak, but have since rebounded by about 58% from that lower base. The Hong Kong Government has generally resisted pressure for large-scale public expenditures to stimulate the economy due to growing public policy concerns with the government budget deficit. The surplus for fiscal year 2004-05 was $2.7 billion or 1.7% of GDP, attributed to the sales of government bonds and notes.

Hong Kong enjoys a number of economic strengths, including accumulated public and private wealth from decades of unprecedented growth, a sound banking system, virtually no public debt, a strong legal system, and an able and rigorously enforced anticorruption regime. The need for economic restructuring poses difficult challenges and choices for the government. Hong Kong is endeavoring to improve its attractiveness as a commercial and trading center, especially after China’s entry into the WTO, and continues to refine its financial architecture. The government is deepening its economic interaction with the Pearl River Delta in an effort to maintain Hong Kong’s position as a gateway to China. These efforts include the conclusion of a free trade agreement with China, the Closer Economic Partnership Arrangement (CEPA), which applies zero tariffs to all Hong Kong-origin goods and preferential treatment in 27 service sectors. Hong Kong, along with the Macau SAR, is also participating in a new pan-Pearl River Delta trade block with nine Chinese provinces, which aims to lower trade barriers among members, standardize regulations, and improve infrastructure. 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 2005, showed 98% of respondents had a “good” or “satisfactory” outlook for 2006. Survey results indicated a positive economic outlook through 2008.

On the international front, Hong Kong is a separate and 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 the reduction of trade barriers. Hong Kong residents across the political spectrum supported China’s accession to the WTO, believing this would open new opportunities on the Mainland for local firms and stabilize relations between Hong Kong’s two most important trade and investment partners, the United States and China.

FOREIGN RELATIONS

Hong Kong’s foreign relations and defense are the responsibility of China. Hong Kong is an independent customs territory and economic entity separate from the rest of China and is able to enter into international agreements on its own behalf in commercial and economic matters. Hong Kong, independently of China, participates as a full member of numerous international economic organizations including the World Trade Organization (WTO), the Asia Pacific Economic Cooperation forum (APEC), and the Financial Action Task Force (FATF).

U.S.-HONG KONG RELATIONS

U.S. policy toward Hong Kong, grounded in a determination to promote Hong Kong’s prosperity, autonomy, and way of life, is stated in the U.S.-Hong Kong Policy Act of 1992. The United States maintains substantial economic and political interests in Hong Kong. The United States supports Hong Kong’s autonomy by concluding and implementing bilateral agreements; promoting trade and investment; arranging high-level visits; broadening law enforcement cooperation; bolstering educational, academic, and cultural links; and supporting the large community of U.S. citizens and visitors.

Hong Kong is an active member of the global coalition against terrorism. Hong Kong has joined the Container Security Initiative and remains an important partner with regard to eliminating funding for terrorist networks and combating money laundering. Hong Kong has passed legislation designed to bring Hong Kong into compliance with applicable UN antiterror resolutions and Financial Action Task Force recommendations.

The United States has substantial economic and social ties with Hong Kong. There are some 1,100 U.S. firms, including 868 regional operations (262 regional headquarters and 606 regional offices), and about 54,000 American residents in Hong Kong. According to U.S. Government statistics, U.S. exports to Hong Kong totaled $15.8 billion in 2004. U.S. direct investment in Hong Kong at the end of 2004 totaled about $43.7 billion, making the United States one of Hong Kong’s largest investors, along with China, Japan, and the Netherlands.

The United States and Hong Kong signed a new civil aviation agreement in October 2002, which significantly liberalized the aviation market. Hong Kong enjoys a high degree of autonomy as a separate customs territory, with no changes to borders, staffing, or technology export controls since the 1997 handover. Intellectual property rights (IPR) protection has improved substantially in recent years and the introduction of effective new legislation to control illicit production and improved enforcement has now made Hong Kong a regional model for effective IPR protection. The Office of the U.S. Trade Representative and other U.S. agencies now regularly cite Hong Kong as an example for others.

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

1520–18th Street NW
Washington, DC 20036
Tel: (202) 331-8947
Fax: (202) 331-8958
Web Site: http://www.hketowashington.gov.hk/dc/index.htm.

115 East 54th Street
New York, NY 10022
Tel: (212) 752-3320
Fax: (212) 752-3395
Web Site: http://www.hketony.gov.hk/ny/index.htm.

130 Montgomery Street
San Francisco, CA 94104
Tel: (415) 835-9300
Fax: (415) 421-0646
Web Site: http://www.hketosf.gov.hk/sf/index.htm.

Principal U.S. Embassy Officials

HONG KONG (CG) Address: 26 Garden Road, Central; APO/FPO: AmConGen Hong Kong, PSC 461, Box 1, FPO AP 96521; Phone: (852) 2523-9011; Fax: (852) 2845-1598; Workweek: 0830-1730; Website: USCONSULATE.ORG.HK.

Last Updated: 11/26/2006

TRAVEL

Consular Information Sheet : August 1, 2006

Country Description: Hong Kong, a Special Administrative Region (SAR) of the People’s Republic of China (PRC) since July 1, 1997, has a high degree of autonomy, except in the areas of defense and foreign policy, and retains its own currency, laws, and border controls. It is composed of three geographic areas: the New Territories, Kowloon Peninsula, and Hong Kong Island. Hong Kong SAR is cosmopolitan and highly developed. Tourist facilities and services are widely available. The Hong Kong SAR Government has a web site in English at http://www.info.gov.hk/hkfacts/facts_e.htm, which provides useful information (“Hong Kong Fact Sheets”) on a comprehensive range of subjects.

Entry/Exit Requirements: A passport with a minimum of six months validity remaining and evidence of onward/return transportation by sea/air are required. A visa is not required for tourist visits of up to 90 days by U.S. citizens. U.S. citizens who arrive in Hong Kong with an expired or damaged passport may be refused entry and returned to the United States at their own expense. The U.S. Consulate General cannot provide guarantees on behalf of travelers in such situations, and therefore encourages U.S. citizens to ensure their travel documents are valid and in good condition prior to departure from the U.S. An extension of stay may be granted upon application to the Hong Kong SAR Immigration Department. Visas are required to work or study in Hong Kong. A departure tax and an airport security tax must be paid at the airport, unless these have been included in the traveler’s airfare. Public transportation from Hong Kong’s International Airport at Chek Lap Kok to Central Hong Kong (about 25 miles) is readily available, as are taxis. Travelers should exchange sufficient money for transportation at the airport exchange facility located immediately outside the baggage claim area. For the most current information concerning entry and exit requirements, including required documentation, prohibited items etc., travelers can consult the Hong Kong SAR Immigration Department, Immigration Tower, 7 Gloucester Road, Wanchai, Hong Kong (tel. (852) 2824-6111, fax (852) 2877-7711, email: enquiry@immd.gov.hk, Internet Home Page: http://www.immd.gov.hk), or the Embassy of the People’s Republic of China, 2300 Connecticut Avenue, N.W., Washington D.C. 20008, tel. (202) 328-2500, Internet home page: http://www.china-embassy.org, or the PRC consulates general in Chicago, Houston, Los Angeles, New York City, or San Francisco. Overseas, inquiries may be made at the nearest PRC embassy or consulate.

U.S. citizens should obtain all required visas prior to departing the U.S. Specifically, U.S. citizens wishing to travel to the PRC from Hong Kong require a PRC visa and should apply at the PRC Embassy or consulates in the U.S. Parents whose children hold U.S. passports should be aware that the PRC Visa Office may require original birth certificates or other U.S. documents for these children. Persons applying in Hong Kong for PRC visas for U.S.-born children have been unable to obtain PRC visas without the original U.S. birth certificate. Parents should consider bringing their children’s birth certificates if applying for a PRC visa in Hong Kong. Further information on travel to and around the PRC is available in the China Consular Information Sheet.

Visit the Embassy of the People’s Republic of China web site at http://www.china-embassy.org for the most current visa information.

Safety and Security: Although there have been no terrorist incidents in Hong Kong, the Department of State reminds Americans everywhere that U.S. citizens and interests are at a heightened risk of attack by terrorists. These individuals and groups have proved that they do not distinguish between official and civilian targets. Because security awareness has been elevated within the United States, terrorists may target U.S. interests overseas. Private Americans should be aware of the potential risks when making travel plans and should remain vigilant with regard to their personal security and exercise caution. The State Department will continue to develop information about potential threats.

There have recently been cases where both local and foreign hikers have been robbed/beaten in country parks and Victoria Peak. Although no U.S. citizens have been reported among these victims, U.S. citizens should be extremely vigilant when walking in these areas and should travel in groups.

For the latest security information, Americans traveling abroad should regularly monitor the Department’s Internet web site, where the current Worldwide Caution Public Announcement, Travel Warnings and Public Announcements can be found. Up-to-date information on safety and security can also be obtained by calling 1-888-407-4747 toll free in the U.S., or for callers outside the U.S. and Canada, a regular toll-line at 1-202-501-4444. These numbers are available from 8:00 a.m. to 8:00 p.m. Eastern Time, Monday through Friday (except U.S. federal holidays).

Crime: Hong Kong SAR has a low crime rate. Travelers should exercise caution when in congested areas and pay particular attention to personal belongings while in crowded markets and while traveling on public transportation. Violent crime, though rare, does occur.

Information for Victims of Crime: The loss or theft abroad of a U.S. passport should be reported immediately to the local police and the nearest U.S. Embassy or Consulate. If you are the victim of a crime while overseas, in addition to reporting to local police, please contact the nearest U.S. Embassy or Consulate for assistance. The Embassy/Consulate staff can, for example, assist you to find appropriate medical care, contact family members or friends, and explain how funds could be transferred. Although the investigation and prosecution of the crime is solely the responsibility of local authorities, consular officers can help you to understand the local criminal justice process and to find an attorney if needed.

Hong Kong has a crime victim compensation program available to U.S. citizens who are legal residents or tourists in Hong Kong. For more detailed information on the program and its requirements, please contact directly the following Hong Kong authorities:

Criminal and Law Enforcement Injuries Compensation Section of the Social Welfare Department
Room 703, 7/F, Wu Chung House
213 Queen’s Road East
Wanchai, Hong Kongy
Phone: (852) 2838-6079, 2892-5223,
2892-5220 or 2892-5222
Fax: (852) 2575-7938
Email: grcleic@swd.gov.hk
Social Security—Social Welfare Department
http://www.info.gov.hk/swd/html_eng/ser_sec/soc_secu/

Application forms, correspondence, and telephone assistance can all be done in either English or Chinese.

Medical Facilities and Health Information: Good medical facilities are available, and there are many Western-trained physicians in Hong Kong. Doctors and hospitals generally do not accept credit cards and require immediate cash payment for health services. Many U.S. health insurance providers do not cover their subscribers overseas. U.S. citizens should check with their health insurance provider prior to travel. The Medicare/Medicaid program does not provide payment for medical services outside the United States.

Information on vaccinations and other health precautions, such as safe food and water precautions and insect bite protection, may be obtained from the Centers for Disease Control and Prevention’s hotline for international travelers at 1-877-FYI-TRIP (1-877-394-8747); fax 1-888-CDC-FAXX (1-888-232-3299), or via the CDC’s Internet site at http://www.cdc.gov/travel. For information about outbreaks of infectious diseases abroad consult the World Health Organization’s (WHO) website at http://www.who.int/en. Further health information for travelers is available at http://www.who.int/ith.

Medical Insurance: The Department of State strongly urges Americans to consult with their medical insurance company prior to traveling abroad to confirm whether their policy applies overseas and whether it will cover emergency expenses such as a medical evacuation.

Traffic Safety and Road Conditions: While in a foreign country, U.S. citizens may encounter road conditions that differ significantly from those in the United States. The information below concerning Hong Kong is provided for general reference only, and may not be totally accurate in a particular location or circumstance. In Hong Kong, traffic moves on the left. During the daytime, traffic congests Hong Kong’s urban areas. Each year, some 21,000 drivers, passengers, and pedestrians are injured or killed in traffic accidents in Hong Kong. Speed limits are 50 kilometers per hour in urban areas and 80 kilometers per hour on highways unless otherwise marked. The use of seat belts in vehicles, if so equipped, is mandatory both in the front and back seats.

The maximum penalty for dangerous driving causing death can be a fine of $50,000 HK ($6,500 U.S.), imprisonment for five years and disqualification from driving for not less than two years on first conviction. At the scene of a traffic accident, drivers are required to undergo alcohol level testing. Any driver found exceeding the prescribed limit of blood alcohol level may face prosecution under Hong Kong law. The use of handheld cellular phones while driving in Hong Kong is strictly prohibited. A breach of this law can lead to a maximum fine of $2,000 HK ($260 U.S.). However, motorists can use “hand-free devices,” such as headphones and speakerphones. Hong Kong law requires that all registered vehicles carry valid third-party liability insurance. The emergency number for local emergency assistance (equivalent to 911 in the United States) is 999.

About 90 percent of the population in Hong Kong depends on public transport. Taxis, buses, and the mass transit railway (MTR) are readily available, inexpensive, and generally safe. The MTR is an underground railway network and is the most popular mode of public transport, carrying an average of 2.3 million passengers a day.

A Hong Kong driver’s license may be issued without a test to individuals who hold a valid U.S. driver’s license, provided they have resided in the United States for not less than six months. U.S. citizen visitors who do not plan to stay in Hong Kong for more than twelve months can drive in Hong Kong on their valid U.S. driver’s license. They need not obtain an international driving permit (IDP). An IDP is a legal identification document that translates driving license information into eleven languages, including English, and should only be used as a supplement to a valid driving license.

For specific information concerning Hong Kong driving permits, vehicle inspection, road tax, and mandatory insurance, please visit the Hong Kong Transport Department web site at http://www.info.gov.hk/td, contact the Transport Department at telephone number (852) 2804-2600 or (852) 1823, fax (852) 2824-0433, email: tdenq@td.gov.hk; email the Hong Kong Tourism Board Office in New York at nycwwo@hktb.com; or consult the Hong Kong Tourism Board website at http://www.discoverhongkong.com.

Visit the website of Hong Kong’s tourist office and authority responsible for road safety at http://www.discoverhongkong.com and http://www.info.gov.hk/td.

Aviation Safety Oversight: The U.S. Federal Aviation Administration (FAA) has assessed the Government of Hong Kong as being in compliance with ICAO international aviation safety standards for oversight of Hong Kong’s air carrier operations. For more information, travelers may visit the FAA’s Internet web site at http://www.faa.gov.

Dual Nationality: Under PRC nationality law, persons who are of Chinese descent and who were born in the mainland of China or Hong Kong are PRC citizens. However, under an agreement between the United States and the PRC, all U.S. citizens entering Hong Kong on their U.S. passports, including such persons as may be considered PRC nationals by the PRC authorities, are considered U.S. citizens by the Hong Kong SAR authorities for purposes of ensuring consular access and protection. Dual nationals, who are or previously were Hong Kong residents, and who wish to ensure U.S. consular access and protection after the initial 90-day period of admission into Hong Kong, must declare their U.S. nationality by presenting their U.S. passports to the Hong Kong Immigration Department and completing an application for declaration of change of nationality. This declaration of change of nationality will ensure U.S. consular protection and may also result in loss of one’s Chinese nationality (but not necessarily one’s right of abode). Although such individuals’ failure to declare U.S. nationality may jeopardize U.S. consular protection, such failure will not jeopardize their U.S. citizenship. Dual national residents of Hong Kong who enter Hong Kong on their Hong Kong identity cards rather than their U.S. passports and who desire to guarantee U.S. consular protection should declare their U.S. nationality to the Hong Kong Immigration Department as soon as possible after entry.

Dual nationals contemplating onward travel to PRC should be especially attentive to use of their U.S. passports, as the PRC authorities may require them to use the same document for entry into the PRC as they used to enter Hong Kong. The Nationality Law of the PRC does not recognize dual nationality. U.S. citizens, including such persons as may be considered Chinese nationals by the PRC authorities, who enter and depart the PRC using a U.S. passport and a valid PRC visa retain the right of U.S. consular access and protection under the U.S.-PRC Consular Convention. The ability of the U.S. Embassy or Consulates General in the PRC to provide normal consular services would be extremely limited should a dual national enter the PRC on a non-U.S. passport. Therefore, travelers should carefully consider whether or not to use a passport or travel document other than their U.S. passport.

Further information on consular protection and dual nationality is available on the Department of State Consular Affairs Home Page. Information can also be obtained from the Bureau of Consular Affairs of the Department of State at 2201 C Street, N.W., Washington, D.C. 20520, or call tel. (202) 647-6769, or the U.S. Consulate General in Hong Kong SAR at (852) 2841-2211. Information on the right of abode in Hong Kong may be obtained from the Hong Kong Immigration Department at tel. (852) 2824-4055, fax: (852) 2598-8388, via the Internet at: http://www.immd.gov.hk/, or via email at: roa@immd.gov.hk.

Customs Regulations: Hong Kong SAR customs authorities enforce strict regulations concerning temporary importation into or export from Hong Kong of controlled items such as firearms and ammunition, ivory, narcotics, medications, animals and plants, meat and poultry, textiles, and sensitive high technology or military products. Travelers bringing such goods into Hong Kong without a license may be prosecuted and the goods may be seized. The penalty for trafficking in dangerous drugs can be life imprisonment and a heavy fine. Other items that travelers must declare to customs officials are liquors, tobacco, cigarettes and cigars, methyl alcohol, and merchandise imported for commercial purposes. There are no currency restrictions for travelers.

Travelers are liable to prosecution and possible detention if they bring into/out of Hong Kong any firearm or ammunition. Unless otherwise exempted by laws, possession of an “imitation firearm” is also an offence. “Arms” means any firearm, air rifle/air gun/air pistol from which any shot, bullet or missile can be discharged with a muzzle energy greater than two joules, electric stunning device, gun/pistol or other propelling/releasing instrument from or by which a projectile containing any gas or chemical could be discharged, weapon for the discharge of any noxious liquid/gas/powder, and harpoon or spear gun. Paintball guns are included in this category.

Travelers are also liable to prosecution if they bring into/out of Hong Kong any “weapon” which includes Chinese-style throwing dart, gravity knife, gravity-operated steel baton, knuckle duster, Chinese-style fighting iron, spring-loaded steel baton, any knife the blade of which is exposed by a spring or other mechanical/electric device, and any bladed/pointed weapon. Please visit the web site of the Hong Kong Department of Customs and Excise at http://www.info.gov.hk/ customs for specific information regarding Hong Kong customs requirements. In many countries around the world, counterfeit and pirated goods are widely available. Transactions involving such products are illegal and bringing them back to the United States may result in forfeitures and/or fines. A current list of those countries with serious problems in this regard can be found here.

Visitors to Hong Kong should be aware that U.S. law prohibits the importation into the United States of counterfeit, brand-name items, such as watches, compact discs, computer software, and clothing. U.S. Customs officials encourage the use of an ATA (Admission Temporaire/Temporary Admission) Carnet for the temporary admission of professional equipment, commercial samples, and/or goods for exhibitions and fair purposes. ATA Carnet Headquarters is located at the U.S. Council for International Business, 1212 Avenue of the Americas, New York, NY 10036, and issues and guarantees the ATA Carnet in the United States. For additional information, please call (212) 354-4480, send an email to atacarnet@uscib.org, or visit http://www.uscib.org for details.

Dogs and cats may be brought into Hong Kong only with a special permit issued in advance by the Hong Kong Agriculture, Fisheries, and Conservation Department. Dogs and cats imported from the United States may be exempt from quarantine when there are valid health and vaccination certificates and the pets have been in the United States for at least six months. Additional information on importing pets may be obtained from the Livestock Import Control Office of the Hong Kong Agriculture, Fisheries, and Conservation Department at tel. (852) 2150-7057, fax (852)2375-3563, email: icsenquiry@afcd.gov.hk, or via the Internet: http://www.afcd.gov.hk.

Criminal Penalties: While in a foreign country, a U.S. citizen is subject to that country’s laws and regulations, which sometimes differ significantly from those in the United States and may not afford the protections available to the individual under U.S. law. Penalties for breaking the law can be more severe than in the United States for similar offenses.

Persons violating Hong Kong laws, even unknowingly, may be expelled, arrested, or imprisoned. Penalties for possession, use, or trafficking in illegal drugs in Hong Kong are severe, and convicted offenders can expect long jail sentences and heavy fines. Engaging in sexual conduct with children or using or disseminating child pornography in a foreign country is a crime, prosecutable in the United States.

Children’s Issues: For information on international adoption of children and international parental child abduction, see the Office of Children’s Issues website at http://travel.state.gov/family/family_1732.html.

Registration/Embassy Location: Americans living or traveling in Hong Kong are encouraged to register with the nearest U.S. Embassy or Consulate through the State Department’s travel registration website, and to obtain updated information on travel and security within Hong Kong. Americans without Internet access may register directly with the nearest U.S. Embassy or Consulate. By registering, American citizens make it easier for the Embassy or Consulate to contact them in case of emergency. The U.S. Consulate General is located at 26 Garden Road, Central, Hong Kong, 24-hours telephone number (852) 2523-9011, direct lines to American Citizen Services are (852) 2841-2211, 2841-2323, 2841-2225, fax (852) 2845-4845, email acshnk@yahoo.com. The U.S. mailing address is PSC 461, Box 5, FPO AP 96521-0006. Please check our Web site, www.hongkong.usconsulate.gov, for current office hours.

International Adoption : February 2007

The information below has been edited from a report of the State Department Bureau of Consular Affairs, Office of Overseas Citizens Services. For more information, please read the International Adoption section of this book and review current reports online at www.travel.state.gov/family.

Disclaimer: The information in this flyer relating to the legal requirements of specific foreign countries is based on public sources and current understanding. Questions involving foreign and U.S. immigration laws and legal interpretation should be addressed respectively to qualified foreign or U.S. legal counsel.

General: The following is a guide for U.S. citizens who are interested in adopting a child in Hong Kong and applying for an immigrant visa for the child to come to the United States. This process involves complex Hong Kong and U.S. legal requirements. U.S. consular officers give each petition careful consideration on a case-by-case basis to ensure that the legal requirements of both countries have been met, for the protection of the prospective adoptive parent(s), the biological parents(s) and the child. Interested U.S. citizens are strongly encouraged to contact U.S. consular officials in Hong Kong before formalizing an adoption agreement to ensure that appropriate procedures have been followed which will make it possible for the Consulate to issue a U.S. immigrant visa for the child.

Availability of Children for Adoption: Under Hong Kong law, children between six months and 18 years of age can be adopted. Hong Kong Social Welfare Department (SWD) statistics on adoptions indicate that the Social Welfare Department handled foreign 246 adoption applications in 2000/2001. Same statistics also reflect that most children available for adoption are five years old and below, and some of them have health problems or are disabled.

Adoption Authority: The government office responsible for adoptions in Hong Kong is the Adoption Unit, Social Welfare Department, 38 Pier Road, Harbor Building 4/F., Central, Hong Kong (tel: (852) 2852-3107, fax: (852) 2851-9189, email: grau@ swd.gov.hk, website: http://www.info.gov.hk/swd)

Adoption Procedures: The adoption process in Hong Kong begins with the prospective adoptive parents in Hong Kong submitting an application to the Director of the Social Welfare Department. The Social Welfare Department then compiles a “home study” and requires a medical examination of the couple.

If, based on the findings of the home study, the application is approved, the Social Welfare Department attempts to match the couple with a child. If a match is made, the Department gives written consent to release the child into the applicants’ home for a period of at least six months.

An adoption worker will make periodic visits to the applicants’ home to determine whether adoption by the applicants would be in the best interests of the child. Meanwhile, the applicants submit the required applications to the Director of Social Welfare Department and to the Hong Kong District Court for an Adoption Order. Upon receipt of the recommendation from the Director of the Social Welfare Department, the District Court sets a hearing date for the adoption to take place.

As an alternative U.S. citizens in the United States may apply to bring a Hong Kong child to the United States for adoption through the International Social Service (ISS) in Hong Kong under the Intercountry Adoption Program. ISS works closely with Hong Kong’s Social Welfare Department in placing children overseas. ISS has an office in the United States at 700 Light Street, Baltimore, Maryland 21230 (tel: 410-230-2734, fax: 410-230-2741). ISS Baltimore may be able to provide general information on adoptions.

For specific information about Hong Kong adoption procedures, write to International Social Service Hong Kong Branch Office:

International Social Service Hong
Kong Branch
6/F., Southorn Center
130 Hennessy Road
Wanchai, Hong Kong
(tel: (852) 2834-6863,
fax: (852) 2834-7627)
(email: isshkbr@netvigator.com)

Once an U.S. family applies to adopt a Hong Kong child, ISS requests an approved U.S. social agency to perform a background check on the prospective adoptive parents. ISS will try to match an available child on the waiting list and will send the application to the Hong Kong Social Welfare Department for approval of the matching. ISS will forward to the U.S. citizens a comprehensive Child Study Report for their consideration.

Once the Social Welfare Department approves the matching, the Department will apply to the Hong Kong court for a Consent of Adoption. With the Consent of Adoption, ISS will help prepare all the required documentation for the issuance of the child’s visa and traveling to the United States. If necessary, ISS may arrange for the child to be escorted to the United States.

Age and Civil Status Requirements: Married couples who are at least 25 years old, are in good physical and mental health and have adequate resources to parent an adopted child are more likely to succeed in adoption applications. Preferred married couples are those who have been married for at least three years (five years if it is the second marriage for either parent), and can provide the child a stable home.

Persons over age 45 are considered for adopting a child if they are willing to accept older children or children with special needs. Children with special needs are those who have health problems, mental or physical disabilities, or complicated family background. According to ISS, single parents over 25 years old are not preferred unless they have special parental skills, adequate financial ability and support from other family members. Single parents over age 25 who are not preferred can still apply for adoption. However it may be easier for a non-preferred single parent to adopt a child with “special needs’. Applicants must be reasonably educated in order to provide the necessary guidance to the child, and must have no criminal record. Ethnic Chinese stand a better chance than non-Chinese of adopting a Hong Kong child. However, non-Chinese have a good chance of being able to adopt a child if they are willing to consider an older child or adopting a child with special needs.

Residential Requirements: Applicants should be residents in Hong Kong or should offer assurance that they will be in Hong Kong long enough for the adopted child to settle down satisfactorily and for the adoption processing to be completed. This would require a stay of up to 12 months or more in Hong Kong. There is no residential requirement in intercountry adoption cases.

Doctors: The U.S. Consulate General in Hong Kong maintains current lists of doctors and hospitals, should either you or your child experience health problems while in Hong Kong.

Documentary Requirements: Interested persons must submit the following documents in support of their application for adoption in Hong Kong:

• Copy of U.S. passport;
• Copy of marriage certificate or evidence of termination of previous marriage;
• Proof of income;
• Copies of school credentials;
• Evidence of prior adoptions, if any;
• Satisfactory home study report and medical examination reports of the adopting parents.

(These documents are not required by Hong Kong to be authenticated. The agencies in the U. S. engaging in adoptions submit notarized home study and physical exam reports in adoption cases.)

U.S. Immigration Requirements: A Hong Kong child adopted by an U.S. citizen must obtain an immigrant visa before he or she can enter the U.S. as a lawful permanent resident. Please see the International Adoption section of this book for more details and review current reports online at www.travel.state.gov/family.

Embassy and Consulate in the United States: The Embassy of the People’s Republic of China is located at 2300 Connecticut Ave., NW, Washington DC 20008, tel: (202) 328-2500, fax: (202) 588-0032, email: webmaster@china-embassy.org.

The People’s Republic of China also has Consulates in San Francisco, Los Angeles, Houston, New York City, and Chicago.

U. S. Consulate General: 26 Garden Road, Central, and Hong Kong. The mailing address from the U.S. is PSC 461, Box 5, FPO AP 96521-0006; tel: (852) 2841-2211, fax (852) 2845-4845, email: acshnk@netvigator.com.

Additional Information: Prospective adoptive parents are strongly encouraged to consult USCIS publication M-249, The Immigration of Adopted and Prospective Adoptive Children, as well as the Department of State publication, International Adoptions. Please see the International Adoption section of this book for more details and review current reports online at www.travel.state.gov/family.

International Parental Child Abduction : February 2007

The information below has been edited from the report of the State Department Bureau of Consular Affairs, Office of Overseas Citizens Services. For more information, please read the International Child Abduction section of this book and review current reports online at www.travel.state.gov/family.

Disclaimer: The information in this flyer relating to the legal requirements of specific foreign countries is provided for general information only. Questions involving interpretation of specific foreign laws should be addressed to foreign legal counsel.

General Information: The Hague Convention on the Civil Aspects of International Child Abduction (the “Hague Convention”) came into force between the United States and Hong Kong on September 1, 1997. Therefore, Hague Convention provisions for return would apply to children abducted or retained after September 1, 1997. Parents and legal guardians of children taken to Hong Kong prior to September 1, 1997, may still submit applications for access to the child under the Hague Convention in some cases.

The completed Hague application with supporting documents should be submitted to:

The United States Central Authority Office of Children’s Issues
SA-29
U.S. Department of State
2201 C Street, NW
Washington, DC 20520-2818
Phone: (202) 736-9090
Fax: (202) 312-9743
Internet: travel.state.gov/family

For more information, please read the International Parental Child Abduction section of this book and review current reports online at www.travel.state.gov/family.

Legal Representation: You may directly commence proceedings in Hong Kong courts, but it is advisable to retain a lawyer to represent you in such proceedings. If you have any difficulties, you should contact the Central Authority of Hong Kong for more information and assistance. You will usually be required to give evidence as to the circumstances of your child’s removal or retention, usually in the form of a sworn statement or affidavit.

Under the Convention, Hong Kong is not obligated to pay for or in any way assume any costs resulting from court proceedings. Legal aid is available, however, if an applicant passes the merits test and the means test. Information regarding availability of legal aid may be obtained from the Legal Aid Department of Hong Kong. Their 24-hour Enquiry Hotline number is (852) 2537-7677 and fax number is (852) 2537- 5940. Their email address is http://www.info.gov.hk/lad.

Time Frame: The making of a A decision for return under the Hague Convention may take weeks to several months from the time of filing the application. It is important to remember that the Hong Kong legal system differs from that in the United States. How the court considers the case, and how and when it issues its decision, will vary from case to case.

The Hong Kong courts give Hague Convention matters priority, but scheduling is still dependent on court availability. You should consult your Hong Kong lawyer or the Central Authority of Hong Kong for an assessment of the procedure and anticipated delays in Hong Kong.

Appeals: Decisions on Hague applications may be appealed by either party, which may further delay enforcement of a decision. You should consult directly with your Hong Kong lawyer or the Central Authority of Hong Kong regarding appeal procedures.

Criminal Remedies: For information on possible criminal remedies in the United States, please contact your local law enforcement authorities or the nearest office of the Federal Bureau of Investigation. Information is also available on the Internet at the web site of the U.S. Department of Justice, Office of Juvenile Justice and Delinquency Prevention at http://www.ojjdp.ncjrs.org. Please note that criminal charges may complicate a Hague Convention case. Contact the country officer in the Office of Children’s Issues for specific information.

For general questions, please contact the Overseas Citizens Services Hotline toll-free at 1-888-407-4747, available from 8:00 AM through 8:00 PM Eastern Time, Monday through Friday (except U.S. holidays). Callers who are unable to use the toll-free number, such as those calling from overseas, may obtain information and assistance during the hours by calling 1-202-501-4444. This hotline provides information to the general public and forwards callers to the appropriate country officer as necessary. This information is also available on the web at http://travel.state.gov. Please refer the general public to the Web site or to this toll free number during normal working hours. Persons seeking emergency information or emergency assistance outside of these hours, including on weekends or holidays should call 1-202-647-5225.

HONG KONG

Compiled from the December 2004 Background Note and supplemented with additional information from the State Department and the editors of this volume. See the introduction to this set for explanatory notes.

Official Name:
Hong Kong Special Administrative Region

PROFILE

Geography

Area: 1,100 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: (2003) 6.81 million.

Population growth rate: (2003) 0.2%.

Ethnic groups: Chinese 95%; other 5%.

Religions: About 43% participate in some form of religious practice. Christian, about 8%.

Languages: Cantonese (a dialect of Chinese) and English are official.

Education: Literacy—92% (95% male, 88% female).

Health: (2003) Infant mortality rate—2.4/1,000. Life expectancy—81.5 yrs. (overall); 78.6 yrs. males, 84.3 yrs. females.

Work force: (2003) 3.5 million. Wholesale, retail, and import/export trades and restaurants and hotels—43.7%; finance, insurance, real estate, and business services—19.0%; manufacturing—7.5%.

Government

Type: Special Administrative Region (SAR) of China, with its own constitution (the Basic Law).

Branches: Executive—Administration, Executive Council, serving in an advisory role for the Chief Executive. Legislative—Legislative Council elected in September 2004. Judicial—Court of Final Appeal is highest court, other lower courts.

Administrative subdivisions: Hong Kong, Kowloon, New Territories.

Suffrage: Permanent residents, at 18 years or over, living in Hong Kong for the past 7 years are eligible to vote.

Economy (2003)

GDP: (2003) $158 billion.

GDP real growth rate: (2003) 3.2%.

Per capita GDP: (2002) $22,988.

Natural resources: Outstanding deepwater harbor.

Industry: Types—textiles, clothing, electronics, plastics, toys, watches, clocks.

Trade: Exports—$223 billion: clothing, electronics, textiles, watches and clocks, office machinery. Imports—$232 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 2003. Hong Kong is one of the most densely populated areas in the world, with an overall density of some 6,250 people per square kilometer. Cantonese, the official Chinese language in Hong Kong, 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 freely in Hong Kong. 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. 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 Sung 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 also were 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 fled from China to Hong Kong. Hong Kong became an economic success and a manufacturing, commercial, finance, and tourism center. High life expectancy, literacy, per capita income, and other socioeconomic measures attest to Hong Kong's achievements over the last five decades.

GOVERNMENT

The Hong Kong Special Administrative Region (SAR) is headed by Chief Executive Tung Chee Hwa. Mr. Tung began his second 5-year term on July 1, 2002, after his nomination by a selection committee established by the Basic Law. His selection was approved by China's State Council. The selection committee is made up of 800 Hong Kong residents from four constituency groups: commercial, industrial, and financial interests; professionals; labor, social services, and religious interests; and the legislature, the Chinese People's Political Consultative Conference, and the P.R.C. National People's Congress. Legislative Council elections were held in September 2004. In accordance with the Basic Law, Hong Kong's constitution, 30 members of the Legislative Council were elected by functional or occupational constituencies and, beginning with the 2004 election, 30 were directly elected.

The 2004 elections were seen as generally free, open and widely contested, though there were allegations of voter intimidation. The Hong Kong Government is currently engaged in a public consultation process intended to lead to changes in the mechanism for choosing the Chief Executive and forming the Legislative Council and move toward the "ultimate aim" of universal suffrage as prescribed by the Basic Law. In April 2004, the P.R.C. National People's Congress Standing Committee issued a decision on the scope and pace of constitutional reform, which laid out certain conditions for the process of democratic development. The Hong Kong Government also implemented the Principal Officials Accountability System in July 2002, which was designed to make the government more responsive to public concerns. Eleven political appointees, directly responsible to the Chief Executive, to run the 11 policy bureaus were added. Three other senior civil service positions—the Chief Secretary, Financial Secretary, and Justice Secretary—also were converted to political appointments, although without a change in personnel.

Principal Government Officials

Last Updated: 12/10/2004

Chief Executive: TUNG Chee-hwa
Chief Secretary for Administration: Donald TSANG Yam-kuen
Sec. for Civil Service: Joseph W. P. WONG
Sec. for Commerce, Industry, & Technology: John TSANG
Sec. for Constitutional Affairs: Stephen LAM
Sec. for Economic Development & Labor: Stephen IP
Sec. for Education & Manpower: Arthur LI
Sec. for Environment, Transport, & Works: Sarah LIAO , Dr.
Sec. for Finance: Henry TANG
Sec. for Financial Services & the Treasury: Frederick MA
Sec. for Health, Welfare, & Food: York CHOW
Sec. for Home Affairs: Patrick HO , Dr.
Sec. for Housing, Planning, & Lands: Michael M. Y. SUEN
Sec. for Justice: Elsie LEUNG
Sec. for Security: Ambrose Siu-kwong LEE
Chief Executive, Hong Kong Monetary Authority: Joseph YAM
Chief Justice: Andrew LI
Pres., Legislative Council: Rita FAN
Commissioner, Independent Commission Against Corruption: Raymond WONG
Director of Audit: Benjamin TANG

POLITICAL CONDITIONS

On July 1, 1997, China resumed the exercise of sovereignty over Hong Kong, ending more than 150 years of British colonial rule. 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 will retain its political, economic, and judicial systems and unique way of life for 50 years after reversion and will continue to participate in international agreements and organizations under the name, "Hong Kong, China." In the

past year and a half, China has taken on a more active role in overseeing the Hong Kong Government's management of political developments in the Special Administrative Region. While Hong Kong remains a free and open society where human rights are respected, courts are independent, and there is well-established respect for the rule of law, Hong Kong groups have alleged manipulation or pressure in connection with the September 12, 2004 Legislative Council election. The Hong Kong Government has promised to investigate thor-oughly all such allegations.

ECONOMY

Hong Kong is one of the world's most open and dynamic economies. Hong Kong per capita GDP is comparable to other developed countries. Real GDP expanded by 1.9% in 2002 year-on-year. Domestic consumption and investment remained subdued due to near record unemployment and uncertainty about the future. While severe acute respiratory syndrome (SARS) caused the Hong Kong economy to shrink during the first half of 2003, second quarter real GDP expanded by 3.2% year-on-year. Hong Kong experienced deflation from November 1998 until July 2004, when inflation reappeared at a 0.9% rate, measured year-on-year. A slack property market has also contributed significantly to deflation. By mid-2003, property prices had fallen 66% from their late 1997 peak, but have since rebounded by about 40% from that lower base. The Hong Kong Government has generally resisted pressure for large-scale public expenditures to stimulate the economy due to growing public policy concerns with the government budget deficit. The shortfall for fiscal year 2003-04 was $5.1 billion or 3.2% of GDP, attributed to both declining revenue and rising expenditures.

Hong Kong enjoys a number of economic strengths, including accumulated public and private wealth from decades of unprecedented growth, a sound banking system, virtually no public debt, a strong legal system, and an able and rigorously enforced anti-corruption regime. The need for economic restructuring poses difficult challenges and choices for the government. Hong Kong is endeavoring to improve its attractiveness as a commercial and trading center, especially after China's entry into the WTO, and continues to refine its financial architecture. The government is deepening its economic interaction with the Pearl River Delta in an effort to maintain Hong Kong's position as a gateway to China. These efforts include the conclusion of a free trade agreement with China, the Closer Economic Partnership Arrangement (CEPA), which applies zero tariffs to 1,087 products and improved market access for 26 service areas. Hong Kong, along with the Macau SAR, is also participating in a new pan-Pearl River Delta trade block with nine Chinese provinces, which aims to lower trade barriers among members, standardize regulations, and improve infrastructure. 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 November 2003, showed 81% of respondents had a "good" or "satisfactory" outlook for 2004. Survey results indicated a positive economic outlook through 2005.

On the international front, Hong Kong is a separate and 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 the reduction of trade barriers. Hong Kong residents across the political spectrum supported China's accession to the WTO, believing this would open new opportunities on the Mainland for local firms and stabilize relations between Hong Kong's two most important trade and investment partners, the United States and China.

FOREIGN RELATIONS

Hong Kong's foreign relations and defense are the responsibility of China. Hong Kong is an independent customs territory and economic entity separate from the rest of China and is able to enter into international agreements on its own behalf in commercial and economic matters. Hong Kong, independently of China, participates as a full member of numerous international economic organizations including the World Trade Organization (WTO), the Asia Pacific Economic Cooperation forum (APEC), and the Financial Action Task Force (FATF).

U.S.-HONG KONG RELATIONS

U.S. policy toward Hong Kong, grounded in a determination to promote Hong Kong's prosperity, autonomy, and way of life, is stated in the U.S.-Hong Kong Policy Act of 1992. The United States maintains substantial economic and political interests in Hong Kong. The United States supports Hong Kong's autonomy by concluding and implementing bilateral agreements; promoting trade and investment; arranging high-level visits; broadening law enforcement cooperation; bolstering educational, academic, and cultural links; and supporting the large community of U.S. citizens and visitors.

Hong Kong is an active member of the global coalition against terrorism. Hong Kong has joined the Container Security Initiative and remains an important partner with regard to eliminating funding for terrorist networks and combating money laundering. Hong Kong has passed legislation designed to bring Hong Kong into compliance with applicable UN anti-terror resolutions and Financial Action Task Force recommendations.

The United States has substantial economic and social ties with Hong Kong. There are some 1,100 U.S. firms, including 740 regional operations (242 regional headquarters and 498 regional offices), and about 55,000 American residents in Hong Kong. According to U.S. Government statistics, U.S. exports to Hong Kong totaled $13.5 billion in 2003, and twoway trade totaled $22.4 billion. U.S. direct investment in Hong Kong at the end of 2003 totaled about $44.3 billion, making the United States one of Hong Kong's largest investors, along with China, Japan, and the Netherlands.

The United States and Hong Kong signed a new civil aviation agreement in October 2002, which significantly liberalized the aviation market. Hong Kong enjoys a high degree of autonomy as a separate customs territory, with no changes to borders, staffing, or technology export controls since the 1997 handover. Intellectual property rights (IPR) protection has improved substantially in recent years and the introduction of effective new legislation to control illicit production and improved enforcement has now made Hong Kong a regional model for effective IPR protection. The Office of the U.S. Trade Representative and other U.S. agencies now regularly cite Hong Kong as an example for others.

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

1520—18th Street NW
Washington, DC 20036
Tel: (202) 331-8947;
Fax: (202) 331-8958
Web Site: http://www.hongkong.org/washington_dc.html

115 East 54th Street
New York, NY 10022
Tel: (212) 752-3320; Fax: (212) 752-3395
Web Site: http://www.hongkong.org/new_york.html

130 Montgomery Street
San Francisco, CA 94104
Tel: (415) 835-9300;
Fax: (415) 421-0646
Web Site: http://www.hongkong.org/san_francisco.html

Principal U.S. Embassy Officials

HONG KONG (M) Address: 26 Garden Road, Central; APO/FPO: AmConGen Hong Kong, PSC 461, Box 1, FPO AP 96521; Phone: (852) 2523-9011; Fax: (852) 2845-1598; Workweek: 0830-1730; Website: USCONSULATE.ORG.HK

TRAVEL

Consular Information Sheet

October 22, 2004

Country Description: Hong Kong, a Special Administrative Region (SAR) of the People's Republic of China (PRC) since July 1, 1997, has a high degree of autonomy, except in the areas of defense and foreign policy, and retains its own currency, laws, and border controls. It is composed of three geographic areas: the New Territories, Kowloon Peninsula, and Hong Kong Island. Hong Kong SAR is cosmopolitan and highly developed. Tourist facilities and services are widely available. The Hong Kong SAR Government has a web site in English at http://www.info.gov.hk/hkfacts/facts_e.htm, which provides useful information on a comprehensive range of subjects.

Entry/Exit Requirements: A passport with a minimum of six months validity remaining and evidence of onward/return transportation by sea/air are required. A visa is not required for tourist visits of up to 90 days by U.S. citizens. U.S. citizens who arrive in Hong Kong with an expired or damaged passport may be refused entry and returned to the United States at their own expense. The U.S. Consulate General cannot provide guarantees on behalf of travelers in such situations, and therefore encourages U.S. citizens to ensure their travel documents are valid and in good condition prior to departure from the U.S. An extension of stay may be granted upon application to the Hong Kong SAR Immigration Department. Visas are required to work or study in Hong Kong. A departure tax and an airport security tax must be paid at the airport, unless these have been included in the traveler's airfare. Public transportation from Hong Kong's International Airport at Chek Lap Kok to Central Hong Kong (about 25 miles) is readily available, as are taxis. Travelers should exchange sufficient money for transportation at the airport exchange facility located immediately outside the baggage claim area. For the most current information concerning entry and exit requirements, including required documentation, prohibited items etc., travelers can consult the Hong Kong SAR Immigration Department, Immigration Tower, 7 Gloucester Road, Wanchai, Hong Kong (tel. (852) 2824-6111, fax (852) 2877-7711, e-mail: enquiry@immd.gov.hk, Internet Home Page: http://www.immd.gov.hk), or the Embassy of the People's Republic of China, 2300 Connecticut Avenue, N.W., Washington D.C. 20008, tel. (202) 328-2500, Inter-net home page: http://www.chinaembassy.org, or the PRC consulates general in Chicago, Houston, Los Angeles, New York City, or San Francisco. Overseas, inquiries may be made at the nearest PRC embassy or consulate.

U.S. citizens should obtain all required visas prior to departing the U.S. Specifically, U.S. citizens wishing to travel to the PRC from Hong Kong require a PRC visa and should apply at the PRC Embassy or consulates in the U.S. Parents whose children hold U.S. passports should be aware that the PRC Consulate or Visa Office may require original birth certificates or other U.S. documents for these children. Persons applying in Hong Kong for PRC visas for U.S.-born children have been unable to obtain PRC visas without the original U.S. birth certificate. Parents should consider bringing their children's birth certificates if applying for a PRC visa in Hong Kong. Further information on entry and exit requirements for the PRC is available on the China Consular Information Sheet.

In an effort to prevent international child abduction, many governments have initiated procedures at entry/exit points. These often include requiring documentary evidence of relationship and permission for the child's travel from the parent(s) or legal guardian if not present. Having such documentation on hand, even if not required, may facilitate entry/departure.

Dual Nationality: Under PRC nationality law, persons who are of Chinese descent and who were born in the mainland of China or Hong Kong are PRC citizens. However, under an agreement between the United States and the PRC, all U.S. citizens entering Hong Kong on their U.S. passports, including such persons as may be considered PRC nationals by the PRC authorities, are considered U.S. citizens by the Hong Kong SAR authorities for purposes of ensuring consular access and protection.

Dual nationals, who are or previously were Hong Kong residents, and who wish to ensure U.S. consular access and protection after the initial 90-day period of admission into Hong Kong, must declare their U.S. nationality by presenting their U.S. passports to the Hong Kong Immigration Department and completing an application for declaration of change of nationality. This declaration of change of nationality will ensure U.S. consular protection and will also result in loss of one's Chinese nationality (but not necessarily one's right of abode). Although such individuals' failure to declare U.S. nationality may jeopardize U.S. consular protection, such failure will not jeopardize their U.S. citizenship. Dual national residents of Hong Kong who enter Hong Kong on their Hong Kong identity cards rather than their U.S. passports and who desire to guarantee U.S. consular protection should declare their U.S. nationality to the Hong Kong Immigration Department as soon as possible after entry.

Dual nationals contemplating onward travel to PRC should be especially attentive to use of their U.S. passports, as the PRC authorities may require them to use the same document for entry into the PRC as they used to enter Hong Kong. The Nationality Law of the PRC does not recognize dual nationality. U.S. citizens, including such persons as may be considered Chinese nationals by the PRC authorities, who enter and depart the PRC using a U.S. passport and a valid PRC visa retain the right of U.S. consular access and protection under the U.S.-PRC Consular Convention. The ability of the U.S. Embassy or Consulates General in the PRC to provide normal consular services would be extremely limited should a dual national enter the PRC on a non-U.S. passport. Therefore, travelers should carefully consider whether or not to use a passport or travel document other than their U.S. passport.

Further information on consular protection and dual nationality is available on the Department of State Consular Affairs Home Page at http://travel.state.gov. Information can also be obtained from the Bureau of Consular Affairs of the Department of State at 2201 C Street, N.W., Washington, D.C. 20520, or call tel. (202) 647-6769, or the U.S. Consulate General in Hong Kong SAR at (852) 2841-2211. Information on the right of abode in Hong Kong may be obtained from the Hong Kong Immigration Department at tel. (852) 2824-4055, fax: (852) 2598-8388, via the Internet at: http://www.immd.gov.hk/, or via e-mail at: roa@immd.gov.hk.

Safety and Security: Although there have been no terrorist incidents in Hong Kong, the Department of State reminds Americans everywhere that U.S. citizens and interests are at a heightened risk of attack by terrorists. These individuals and groups have proved that they do not distinguish between official and civilian targets. Because security awareness has been elevated within the United States, terrorists may target U.S. interests overseas. Private Americans should be aware of the potential risks when making travel plans and should remain vigilant with regard to their personal security and exercise caution. The State Department will continue to develop information about potential threats.

There have recently been cases where both local and foreign hikers have been robbed/beaten in country parks and Victoria Peak. Although no U.S. citizens have been reported among these victims, U.S. citizens should be extremely vigilant when walking in these areas and should travel in groups.

For the latest security information, Americans traveling abroad should regularly monitor the Department's Internet web site at http://travel.state.gov where the current Worldwide Caution Public Announcement, Travel Warnings and Public Announcements can be found. Up to date information on security can also be obtained by calling 1-888-407-4747 toll free in the United States, or, for callers outside the United States and Canada, a regular toll line at 1-317-472-2328. These numbers are available from 8:00 a.m. to 8:00 p.m. Eastern Time, Monday through Friday (except U.S. federal holidays).

U.S. Government facilities in Hong Kong, as well as worldwide, remain at a heightened state of alert. Facilities may temporarily close or suspend public services from time to time for security reasons. In those instances, U.S. embassies and consulates will make every effort to provide emergency services to U.S. citizens. U.S. citizens are urged to monitor the local news and maintain contact with the nearest U.S. Embassy or Consulate. The Consulate encourages all U.S. citizens to register their presence in Hong Kong, which can be done on the Consulate General website: http://www.hongkong.usconsulate.gov.

Crime: Hong Kong SAR has a low crime rate. Travelers should exercise caution when in congested areas and pay particular attention to personal belongings while in crowded markets and while traveling around Hong Kong on public transportation. Violent crime, though rare, does occur in Hong Kong and Macau. The loss or theft abroad of a U.S. passport should be reported immediately to the local police and to the nearest U.S. Embassy or Consulate. If you are the victim of a crime while overseas, in addition to reporting to local police, please contact the nearest U.S. Embassy or Consulate for assistance. The Embassy/Consulate staff can, for example, assist you to find appropriate medical care, to contact family members or friends and explain how funds could be transferred. Although the investigation and prosecution of the crime is solely the responsibility of local authorities, consular officers can help you to understand the local criminal justice process and provide a list of local attorneys if needed.

U.S. citizens may refer to the Department of State's pamphlet, A Safe Trip Abroad, for ways to promote a trouble-free journey. The pamphlet is available by mail from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402, via the Internet at http://www.gpoaccess.gov/index.html, or via the Department of State, Bureau of Consular Affairs home page at http://travel.state.gov.

Medical Facilities: Good medical facilities are available, and there are many Western-trained physicians in Hong Kong. Doctors and hospitals generally do not accept credit cards and require immediate cash payment for health services. Many U.S. health insurance providers do not cover their subscribers overseas. U.S. citizens should check with their health insurance provider prior to travel. The Medicare/Medicaid program does not provide payment for medical services outside the United States.

Medical Insurance: The Department of State strongly urges Americans to consult with their medical insurance company prior to traveling abroad to confirm whether their policy applies overseas and if it will cover emergency expenses such as a medical evacuation. U.S. medical insurance plans seldom cover health costs incurred outside the United States unless supplemental coverage is purchased. Further, the U.S. Medicare and Medicaid programs do not provide payment for medical services outside the United States. However, many travel agents and private companies offer insurance plans that will cover health care expenses incurred overseas, including emergency services such as medical evacuations. When making a decision regarding health insurance, Americans should consider that many foreign doctors and hospitals require payment in cash prior to providing service and that a medical evacuation to the United States may cost well in excess of $50,000. Uninsured travelers who require medical care overseas often face extreme difficulties. When consulting with your insurer prior to your trip, please ascertain whether payment will be made to the overseas healthcare provider or if you will be reimbursed later for expenses that you incur. Some insurance policies also include coverage for psychiatric treatment and for disposition of remains in the event of death.

A traveler going abroad with any preexisting medical problems should carry a letter from the attending physician, describing the medical condition and any prescription medications they are currently taking. Useful information on medical emergencies abroad, including over-seas insurance programs, is provided in the Department of State's Bureau of Consular Affairs brochure, Medical Information for Americans Traveling Abroad, available on the Consular Affairs home page at http://travel.state.gov/travel//travel/tips/health/health_1185.html.

Other Health Information: Information on vaccinations and other health precautions, such as safe food and water precautions and insect bite protection, may be obtained from the Centers for Disease Control and Prevention's international travelers' hot-line at 1-877-FYI-TRIP (1-877-394-8747), fax 1-888-CDC-FAXX (1-888-232-3299), or via the CDC's Internet site at http://www.cdc.gov/travel. For information about outbreaks of infectious diseases abroad consult the World Health Organization's website at http://www.who.int/ith. Further health information for travelers is available at http://www.who.int/ith.

Traffic Safety and Road Conditions: While in a foreign country, U.S. citizens may encounter road conditions that differ significantly from those in the United States. The information below concerning Hong Kong is provided for general reference only and may not be totally accurate in a particular location or circumstance.

Safety of Public Transportation: Good
Urban Road Conditions/Maintenance: Good
Rural Road Conditions/Maintenance: Good
Availability of Roadside/Ambulance Assistance: Good

In Hong Kong, traffic moves on the left. During the daytime, traffic congests Hong Kong's urban areas. Each year, some 21,000 drivers, passengers, and pedestrians are injured or killed in traffic accidents in Hong Kong. Speed limits are 50 kilometers per hour in urban areas and 80 kilo-meters per hour on highways unless otherwise marked. The use of seat belts in vehicles, if so equipped, is mandatory both in the front and back seats. The maximum penalty for dangerous driving causing death can be a fine of $50,000 HK ($6,500 US), imprisonment for five years and disqualification from driving for not less than two years on first conviction. At the scene of a traffic accident, drivers are required to undergo alcohol level testing. Any driver found exceeding the prescribed limit of blood alcohol level may face prosecution under Hong Kong law. The use of hand-held cellular phones while driving in Hong Kong is strictly prohibited. A breach of this law can lead to a maximum fine of $2,000 HK ($260 US). However, motorists can use "hand-free devices," such as headphones and speakerphones. Hong Kong law requires that all registered vehicles carry valid third-party liability insurance. The emergency number for local emergency assistance (equivalent to 911 in the United States) is 999.

About 90 percent of the population in Hong Kong depends on public transport. Taxis, buses, and the mass transit railway (MTR) are readily available, inexpensive, and generally safe. The MTR is an underground railway network and is the most popular mode of public transport, carrying an average of 2.3 million passengers a day.

A Hong Kong driver's license may be issued without a test to individuals who hold a valid U.S. driver's license, provided they have resided in the United States for not less than six months. U.S. citizen visitors who do not plan to stay in Hong Kong for more than twelve months can drive in Hong Kong on their valid U.S. driver's license. They need not obtain an international driving permit (IDP). An IDP is a legal identification document that translates driving license information into eleven languages, including English, and should only be used as a supplement to a valid driving license.

For additional general information about road safety, including links to foreign government sites, please see the Department of State, Bureau of Consular Affairs home page at http://travel.state.gov/travel/abroad_roadsafety.html. For specific information concerning Hong Kong driving permits, vehicle inspection, road tax, and mandatory insurance, please visit the Hong Kong Transport Department web site at http://www.info.gov.hk/td, contact the Transport Department at telephone number (852) 2804-2600 or (852) 1823, fax (852) 2824-0433, e-mail: tdenq@td.gov.hk; email the Hong Kong Tourism Board Office in New York at nycwwo@hktb.com; or consult the Hong Kong Tourism Board website at http://www.discoverhongkong.com.

Aviation Safety Oversight: The U.S. Federal Aviation Administration (FAA) has assessed the Civil Aviation Authority of Hong Kong SAR as Category 1—in compliance with international aviation safety standards for oversight of Hong Kong's air carrier operations. For further information, travelers may contact the Department of Transportation within the United States at tel. 1-800-322-7873, or visit the FAA's Internet website at http://www.faa.gov/avr/iasa.

Customs Regulations: Hong Kong SAR customs authorities enforce strict regulations concerning temporary importation into or export from Hong Kong of controlled items such as firearms and ammunition, ivory, narcotics, medications, animals and plants, meat and poultry, textiles, and sensitive high-technology or military products. Travelers bringing such goods into Hong Kong without a license may be prosecuted and the goods may be seized. The penalty for trafficking in dangerous drugs can be life imprisonment and a heavy fine. Other items that travelers must declare to customs officials are liquors, tobacco, cigarettes and cigars, methyl alcohol, and merchandise imported for commercial purposes. There are no currency restrictions for travelers. Please visit the web site of the Hong Kong Department of Customs and Excise: http://www.info.gov.hk/customs for specific information regarding Hong Kong customs requirements.

In many countries around the world, counterfeit and pirated goods are widely available. Transactions involving such products are illegal and bringing them back to the United States may result in forfeitures and/or fines. A current list of those countries with serious problems in this regard can be found here.

Visitors to Hong Kong should be aware that the importation into the United States of counterfeit, brand-name items, such as watches, compact discs, computer software, and clothing, is prohibited by U.S. law. U.S. Customs officials encourage the use of an ATA (Admission Temporaire/Temporary Admission) Carnet for the temporary admission of professional equipment, commercial samples, and/or goods for exhibitions and fair purposes. ATA Carnet Headquarters, located at the U.S. Council for International Business, 1212 Avenue of the Americas, New York, NY 10036, issues and guarantees the ATA Carnet in the United States. For additional information, please call (212) 354-4480, send an e-mail to atacarnet@uscib.org, or visit http://www.uscib.org for details.

Dogs and cats may be brought into Hong Kong only with a special permit issued in advance by the Hong Kong Agriculture, Fisheries, and Conservation Department. Dogs and cats imported from the United States may be exempted from quarantine when there are valid health and vaccination certificates and the pets have been in the United States for at least six months. Additional information on importing pets may be obtained from the Livestock Import Control Office of the Hong Kong Agriculture, Fisheries, and Conservation Department at tel. (852) 2150-7057, fax (852)2375-3563, e-mail: icsenquiry@afcd.gov.hk, or via the Inter-net: http://www.afcd.gov.hk.

Criminal Penalties: While in a foreign country, a U.S. citizen is subject to that country's laws and regulations, which sometimes differ significantly from those in the United States and may not afford the protections available to the individual under U.S. law. Penalties for breaking the law can be more severe than in the United States for similar offenses. Persons violating Hong Kong SAR laws, even unknowingly, may be expelled, arrested, or imprisoned. Penalties for possession, use, or trafficking in illegal drugs in Hong Kong are strict, and convicted offenders can expect lengthy jail sentences and heavy fines.

Under the PROTECT Act of April 2003, it is a crime, prosecutable in the United States, for a U.S. citizen or permanent resident alien, to engage in illicit sexual conduct in a foreign country with a person under the age of 18, whether or not the U.S. citizen or lawful permanent resident alien intended to engage in such illicit sexual conduct prior to going abroad. For purposes of the PROTECT Act, illicit sexual conduct includes any commercial sex act in a foreign country with a person under the age of 18. The law defines a commercial sex act as any sex act, on account of which anything of value is given to or received by a person under the age of 18.

Under the Protection of Children from Sexual Predators Act of 1998, it is a crime to use the mail or any facility of interstate or foreign commerce, including the Internet, to transmit information about a minor under the age of 16 for criminal sexual purposes that include, among other things, the production of child pornography.

Disaster Preparedness: During the storm season (June through September), typhoons hit Hong Kong an average of two or three times a year. As a result, the airport and offices may be closed during these storms. Hong Kong Observatory has a well-developed notification and monitoring system in place. Please consult Hong Kong Observatory's web site at www.hko.gov.hk for further information. General information about natural disaster preparedness is available via the Internet from the U.S. Federal Emergency Management Agency (FEMA) at http://www.fema.gov/.

Children's Issues: For information on international adoption of children and international parental child abduction, please refer to our Inter-net site at http://travel.state.gov/family/index.html or telephone Overseas Citizens Services at 1-888-407-4747. This number is available from 8:00 a.m. to 8:00 p.m. Eastern Standard Time, Monday through Friday (except U.S. federal holidays). Callers who are unable to use toll-free numbers, such as those calling from over-seas, may obtain information and assistance during these hours by calling 1-317-472-2328.

Registration/Consulate Location: U.S. citizens living or traveling in Hong Kong are encouraged to register with the nearest U.S. Embassy or Consulate through the State Department's travel registration website, https://travelregistration.state.gov, and to obtain updated information on travel and security within Hong Kong. U.S. citizens without Internet access may register directly with the nearest U.S. Embassy or Consulate. By registering, U.S. citizens make it easier for the Embassy or Consulate to contact them in case of emergency. The U.S. Consulate General is located at 26 Garden Road, Central, Hong Kong. The U.S. mailing address is PSC 461, Box 5, FPO AP 96521-0006, tel. (852) 2523-9011, fax (852) 2845-4845; Web site: http://hongkong.usconsulate.gov; email address: acshnk@yahoo.com.

The American Citizens Services Unit (ACS) is open to the public from 8:30 am to 12 noon and 1:30 pm to 4:00 pm, Monday through Friday except Wednesday afternoons and U.S. and local holidays.

International Adoption

January 2005

The information below has been edited from a report of the State Department Bureau of Consular Affairs, Office of Overseas Citizens Services. For more information, please read the International Adoption section of this book and review current reports online at www.travel.state.gov/family

Disclaimer: The information in this circular relating to the legal requirements of specific foreign countries is provided for general information only. Questions involving interpretation of specific foreign laws should be addressed to foreign legal counsel.

Availability of Children for Adoption: Recent U.S. immigrant visa statistics reflect the following pattern for visa issuance to orphans:

FY-1996: IR-3 immigrant visas issued to Hong Kong orphans adopted abroad – 15, IR-4 immigrant visas issued to Hong Kong orphans adopted in the U.S. – 23
FY-1997: IR-3 Visas—17,
IR-4 Visas – 11
FY-1998: IR-3 Visas—12,
IR-4 Visas – 29
FY-1999: IR-3 Visas—4,
IR-4 Visas – 10
FY-2000: IR-3 Visas—5,
IR-4 Visas—9

Under Hong Kong law, children between six months and 18 years of age can be adopted. Hong Kong Social Welfare Department (SWD) statistics on adoptions indicate that the Social Welfare Department handled foreign 246 adoption applications in 2000/2001. Same statistics also reflect that most children available for adoption are five years old and below, and some of them have health problems or are disabled.

Hong Kong Adoption Authority: The government office responsible for adoptions in Hong Kong is the Adoption Unit, Social Welfare Department, 38 Pier Road, Harbor Building 4/F., Central, Hong Kong (tel: (852) 2852-3107, fax: (852) 2851-9189, e-mail: grau@swd.gov.hk, web site: http://www.info.gov.hk/swd)

Hong Kong Adoption Procedures: The adoption process in Hong Kong begins with the prospective adoptive parents in Hong Kong submitting an application to the Director of the Social Welfare Department. The Social Welfare Department then compiles a "home study" and requires a medical examination of the couple. If, based on the findings of the home study, the application is approved, the Social Welfare Department attempts to match the couple with a child. If a match is made, the Department gives written consent to release the child into the applicants' home for a period of at least six months. An adoption worker will make periodic visits to the applicants' home to determine whether adoption by the applicants would be in the best interests of the child. Meanwhile, the applicants submit the required applications to the Director of Social Welfare Department and to the Hong Kong District Court for an Adoption Order. Upon receipt of the recommendation from the Director of the Social Welfare Department, the District Court sets a hearing date for the adoption to take place.

As an alternative U.S. citizens in the United States may apply to bring a Hong Kong child to the United States for adoption through the International Social Service (ISS) in Hong Kong under the Intercountry Adoption Program. ISS works closely with Hong Kong's Social Welfare Department in placing children overseas. ISS has an office in the United States at 700 Light Street, Baltimore, Maryland 21230 (tel: 410-230-2734, fax: 410-230-2741). ISS Baltimore may be able to provide general information on adoptions. For specific information about Hong Kong adoption procedures, write to International Social Service Hong Kong Branch Office: International Social Service Hong Kong Branch, 6/F., Southorn Center, 130 Hennessy Road, Wanchai, Hong Kong, (tel: (852) 2834-6863, fax: (852) 2834-7627), (e-mail: isshkbr@netvigator.com).

Age and Civil Status Requirements: Married couples who are at least 25 years old, are in good physical and mental health and have adequate resources to parent an adopted child are more likely to succeed in adoption applications. Preferred married couples are those who have been married for at least three years (five years if it is the second marriage for either parent), and can provide the child a stable home. Persons over age 45 are considered for adopting a child if they are willing to accept older children or children with special needs. Ethnic Chinese stand a better chance than non-Chinese of adopting a Hong Kong child. However, non-Chinese have a good chance of being able to adopt a child if they are willing to consider an older child or adopting a child with special needs.

Residential Requirements: Applicants should be residents in Hong Kong or should offer assurance that they will be in Hong Kong long enough for the adopted child to settle down satisfactorily and for the adoption processing to be completed. This would require a stay of up to 12 months or more in Hong Kong. There is no residential requirement in intercountry adoption cases.

Doctors: The U.S. Consulate General in Hong Kong maintains current lists of doctors and hospitals, should either you or your child experience health problems while in Hong Kong.

Hong Kong Documentary Requirements: Interested persons must submit the following documents in support of their application for adoption in Hong Kong:

• Copy of U.S. passport,
• Copy of marriage certificate or evidence of termination of previous marriage,
• Proof of income,
• Copies of school credentials,
• Evidence of prior adoptions, if any,
• Satisfactory home study report and medical examination reports of the adopting parents. (These documents are not required by Hong Kong to be authenticated. The agencies in the U. S. engaging in adoptions submit notarized home study and physical exam reports in adoption cases.)

U.S. Immigration Requirements: A Hong Kong child adopted by an U.S. citizen must obtain an immigrant visa before he or she can enter the U.S. as a lawful permanent resident. Please see the International Adoption section of this book for more details and review current reports online at travel.state.gov/family

Visa Information & What To Expect: Hong Kong, a Special Administrative Region of the People's Republic of China, is a modern city where English is commonly spoken. A visa is not required for tourist visits by U.S. citizens of up to 90 days. An extension of stay may be granted upon application to the Hong Kong Immigration Department. U.S. citizens must have passports with at least four months validity for entry into Hong Kong. For the most current information concerning entry and exit requirements, travelers should consult the Hong Kong Immigration Department, Immigration Tower, 7 Gloucester Road, Wanchai, Hong Kong, tel: (852) 2829-3001, fax: (852) 2824-1133, Internet home page: http://ww.info.gov.hk/immd, or the Embassy of the People's Republic of China, 2300 Connecticut Ave., NW., Washington DC 20008, tel: (202) 328-2500, or the Chinese Consulates General in Los Angeles, San Francisco, Chicago, New York City, and Houston.

Chinese Embassy and Consulates in the United States: The Embassy of the People's Republic of China is located at 2300 Connecticut Ave., NW, Washington DC 20008, tel: (202) 328-2500, fax: (202) 588-0032, e-mail: webmaster@china-embassy.org. The People's Republic of China also has Consulates in San Francisco, Los Angeles, Houston, New York City, and Chicago.

U. S. Consulate General in Hong Kong: The U.S. Consulate General is located at 26 Garden Road, Central, and Hong Kong. The mailing address from the U.S. is PSC 461, Box 5, FPO AP 96521-0006; tel: (852) 2841-2211, fax (852) 2845-4845, e-mail: acshnk@netvigator.com.

Questions: Specific questions regarding adoption in Hong Kong may be addressed to the Consular Section of the U.S. Consulate General in Hong Kong. You may also contact the Office of Children's Issues, SA-29, 2201 C Street, NW, U.S. Department of State, Washington, DC 20520-2818, Tel: 1-888-407-4747 with specific questions.

International Parental Child Abduction

January 2005

The information below has been edited from the report of the State Department Bureau of Consular Affairs, Office of Overseas Citizens Services. For more information, please read the International Parental Child Abduction section of this book and review current reports online at travel.state.gov

Disclaimer: The information in this circular relating to the legal requirements of a specific foreign country is provided for general information only. Questions involving interpretation of specific foreign laws should be addressed to foreign legal counsel.

General Information: The Hague Convention on the Civil Aspects of International Child Abduction (the "Hague Convention") came into force between the United States and Hong Kong on September 1, 1997. Therefore, Hague Convention provisions for return would apply to children abducted or retained after September 1, 1997. Parents and legal guardians of children taken to Hong Kong prior to September 1, 1997, may still submit applications for access to the child under the Hague Convention in some cases.

Legal Representation: You may directly commence proceedings in Hong Kong courts, but it is advisable to retain a lawyer to represent you in such proceedings. If you have any difficulties, you should contact the Central Authority of Hong Kong for more information and assistance. You will usually be required to give evidence as to the circumstances of your child's removal or retention, usually in the form of a sworn statement or affidavit. Information regarding availability of legal aid may be obtained from the Legal Aid Department of Hong Kong. Their 24-hour Enquiry Hotline number is (852) 2537-7677 and fax number is (852) 2537-5940. Their e-mail address is http://www.info.gov.hk/lad.

Time Frame: The making of a A decision for return under the Hague Convention may take weeks to several months from the time of filing the application. It is important to remember that the Hong Kong legal system differs from that in the United States. How the court considers the case, and how and when it issues its decision, will vary from case to case. The Hong Kong courts give Hague Convention matters priority, but scheduling is still dependent on court availability. You should consult your Hong Kong lawyer or the Central Authority of Hong Kong for an assessment of the procedure and anticipated delays in Hong Kong.

Appeals: Decisions on Hague applications may be appealed by either party, which may further delay enforcement of a decision. You should consult directly with your Hong Kong lawyer or the Central Authority of Hong Kong regarding appeal procedures.

Criminal Remedies: For information on possible criminal remedies in the United States, please contact your local law enforcement authorities or the nearest office of the Federal Bureau of Investigation. Information is also available on the Internet at the web site of the U.S. Department of Justice, Office of Juvenile Justice and Delinquency Prevention at http://www.ojjdp.ncjrs.org. Please note that criminal charges may complicate a Hague Convention case. Contact the country officer in the Office of Children's Issues for specific information.

For general questions, please contact the Overseas Citizens Services Hot-line toll-free at 1-888-407-4747, available from 8:00 AM through 8:00 PM Eastern Time, Monday through Friday (except U.S. holidays). Callers who are unable to use the toll-free number, such as those calling from overseas, may obtain information and assistance during the hours by calling 1-317-472-2328. This hotline provides information to the general public and forwards callers to the appropriate country officer as necessary. This information is also available on the web at http://travel.state.gov. Please refer the general public to the Web site or to this toll free number during normal working hours. Persons seeking emergency information or emergency assistance outside of these hours, including on weekends or holidays should call 1-202-647-5225.

Hong Kong

Introduction
Getting There
Getting Around
People
Neighborhoods
History
Government
Public Safety
Economy
Environment
Shoppping
Education
Health Care
Media
Sports
Parks and Recreation
Performing Arts
Libraries and Museums
Tourism
Holidays and Festivals
Famous Citizens
For Further Study

Hong Kong, Special Administrative Region of China, Asia

Founded: Inhabited since prehistoric times, though the earliest modern people lived there by the 2nd millennium B. C. Modern Hong Kong dates back to the British presence, formalized in 1898.
Location: Southeastern China, in eastern Asia, bordering the South China Sea and China's Guangdong Province
Flag: Red field with a white Hong Kong orchid featuring red stars on each of its five petals.
Motto: "A Future of Excellence and Prosperity for All"
Flower: The Hong Kong orchid, Bauhinia blakeana.
Time Zone: Eight hours ahead of Greenwich Mean Time (GMT plus eight hours)
Ethnic Composition: Chinese, 98%; non-Chinese Asian (mostly Japanese, Indian, Pakistani, Singaporean), 1%; non-Asian (mostly from UK, Canada, Australia, US, New Zealand), 1%
Elevation: Victoria Peak on Hong Kong Island rises to 550 m (1,810 ft); Tai Mo Shan on Lantau Island reaches 957 m (3,140 ft)
Latitude and Longitude: 22°15′N, 114°10′E
Coastline: 733 km (458 mi)
Climate: Subtropical, with monsoons between May and August; cool and humid in winter, hot and rainy from spring through summer, warm and sunny in fall.
Annual Mean Temperature: 22.2°C (72°F); 15°C (59°F) in February; 27.8°C (82°F) in July
Seasonal Average Precipitation: 2,220 mm (88 in)
Government: Special Administrative Region (SAR) of China, with a chief executive appointed by Beijing and a legislature combining elected and appointed officials
Weights and Measures: Metric
Monetary Units: Hong Kong dollar (HK$), with an exchange rate of HK$7.8 to US$1 (December 1999)
Telephone Area Codes: 852

1. Introduction

With its spacious harbor offering deepwater anchorage and its prime location on the edge of the teeming continent of Asia, Hong Kong has long been a major center for trade, finance, and small manufacturing. Hong Kong's commercial importance has ensured its prominence in the global economy as well as in the economy of Asia, a position Hong Kong acquired after the establishment of British hegemony over the region in the nineteenth century, when Hong Kong was transformed from a minor coastal town into a center of British influence in East Asia. Hong Kong's prosperity has continued since the return of the territory to China by the British in 1997. Today Hong Kong stands as a bustling metropolis of almost seven million people, a city centered around an island of gleaming skyscrapers reminiscent of Manhattan and offering the world a lively and fascinating amalgam of the cultures of East and West.

Surface access for automobiles, trucks and buses is by three routes between Hong Kong and mainland China. Two bridges at Man Kam To handle traffic to and from China, and a new link was completed in 1985 at Sha Tau Kok. A third connection is at Lok Ma Chau, where a road linked to the New Territories Circular Road (NTCR) was finished in 1989.

2. Getting There

Highways

Due to Hong Kong's high population density and limited area, there are legal restrictions on the number of vehicles allowed in the city. Even so, about half a million motor vehicles drive Hong Kong's 1,740 kilometers (1,081 miles) of roads. The highway system centers on the NTCR, which rings the city center. A network of bridges and tunnels provides rail and road connections among the various parts of Hong Kong that are separated by water; one of these is the Tsing Ma Bridge, which is among the longest suspension bridges in the world and links Kowloon with Lantau.

Bus and Railroad Service

After the repatriation of Hong Kong in 1997, train service was inaugurated between Kowloon and the cities of Beijing and Shanghai. The Beijing-Kowloon train stops en route at seven intermediate stations. The Shanghai-Kowloon train runs every other day and requires 29 hours each way.

Hong Kong Population Profile

Population: 6,097,000
Area: 1,092 sq km (420 sq mi)
Description: Special Administrative Region (SAR) by the Chinese government, including harbor, Kowloon Peninsula, New Territories, Stonecutters Island, Lantau Island, Hong Kong Island, and more than 230 smaller islands
Ethnic composition: 98% Chinese; 1% non-Chinese Asian (Japanese, Indian, Pakistani, Singaporean); 1% non-Asian (mostly from UK, Canada, Australia, US, New Zealand)
World population rank ¹: 35
Percentage of national population ²: 0.5%
Average yearly growth rate: 3%
Nicknames: The Fragrant Harbor

1. The Hong Kong metropolitan area's rank among the world's urban areas.
2. The percent of China's total population living in the Hong Kong metropolitan area.

Airports

Air access to the city was improved in 1998 when the Hong Kong International Airport began operating on Chek Lap Kok Island and replaced the old airport at Kai Tak. The new airport is connected to the urban areas of Hong Kong by means of a high-speed rail link; travelers going into Hong Kong can make the 23-minute trip downtown by means of the Airport Express train, from which transfers can be made to shuttle buses and Mass Transit Railway (MTR) trains. The MTR itself can be reached by a shuttle bus from the airport, and a number of shuttles connect the airport directly to destinations throughout the city.

Shipping

Access to Hong Kong, the "fragrant harbor," is readily available by sea for both passenger and freight traffic. A ferry service runs from Tuen Mun to Chek Lap Kok Ferry Pier, from which a shuttle accesses the airport.

3. Getting Around

Bus and Commuter Rail Service

Most of the populace uses public transportation, the cheapest and most efficient means of getting around in crowded Hong Kong. Buses are the most readily available and the most used form of public transport and incorporate a minibus service as well. A rapid transit system, the Mass Transit Railway (MTR), connects the main districts of Hong Kong Island and Kowloon with areas as far away as Tsuen Wan in the New Territories. The Kowloon Canton Railway (KCR) runs between Kowloon and Lo Wu, on the border of Hong Kong and mainland China. In the New Territories, the Light Rail Transit (LRT) connects Tuen Mun with Yuen Long. On Hong Kong Island, there is a funicular that connects the Central District with Victoria Peak, and a tram that runs along the island's northern side. Numerous ferry and hovercraft ply the waters among Hong Kong's numerous islands and link them with Kowloon and the New Territories.

Sightseeing

Access to various parts of the city is convenient and relatively inexpensive by both train and bus. Travel within the region is also easily accomplished by means of the train systems and the local buses, and water travel on the different ferries is also cheap and widely used. Sightseers can experience something of traditional Chinese culture in places like the Kam Tin Walled Village (Kut Hing Wei) in the New Territories, the Po Lin Monastery on Lantau Island, or the scenic beauty of the outer islands. Soon both Hong Kong natives and travelers will be able to visit Hong Kong Disneyland, scheduled to open on Penny's Bay in 2005.

4. People

Hong Kong's ethnic composition is almost wholly Chinese, from Guangdong province and Hong Kong itself; some ten percent come mostly from Fukien, Chekiang, Shanghai, Kiangsu, and Taiwan. Non-Chinese constitute only about two percent; about half of these are Asians (mostly from Japan, India, Pakistan, and Singapore), and the remainder are mostly British, Americans, Australians, Canadians, and New Zealanders.

English and Cantonese remain official languages, with the latter more widely spoken. The use of Mandarin is increasing and will be required in schools. Dialects such as Siyi, Chao-chow, Hakka, Hoklo, and Tanka are also used in their respective communities.

Taoism, Confucianism, and Buddhism are the predominant religions in Hong Kong. About ten percent of the population is Christian, with a small number of Hindus, Jews, Sikhs, and Muslims.

5. Neighborhoods

Hong Kong Island is what is typically considered Hong Kong, with crowds pursuing business and pleasure among skyscrapers and elegant department stores and restaurants. The island's Central District, on the north side, is the hub of the Hong Kong good life. To the east of Central is an entertainment district called Wanchai. Further on is Causeway Bay, another area of hotels, restaurants, department stores, and boutiques. The south of Hong Kong Island is mostly residential, with high-rise luxury apartment buildings. Near Aberdeen, also in the south, are two aquatic centers, Ocean Park and Water World.

The theme established by Hong Kong Island's Central District is continued in Kowloon's Tsim Sha Tsui district. The area also boasts a number of museums, the Hong Kong Coliseum, and the Jamia Masjid Islamic Center.

In the New Territories north of the Kowloon hills, one encounters small to medium-sized rural settlements. Towns and villages in the low-lying areas are generally inhabited by Cantonese; settlements in the valleys and foothills are usually populated by the Hakka people. Among the latter are some traditional fortress-like walled villages, such as Kut Hing Wei. The Temple of 10,000 Buddhas is one of several beautiful temples in the New Territories. Much of Kowloon and the New Territories are comprised of crowded shanty towns.

In contrast to both the luxury of Hong Kong Island and Tsim Sha Tsui and the squalor of the shanties, the outlying islands offer scenic natural beauty. Lantau Island, larger than Hong Kong but with 20,000 people, is rustic enough to be the site of the impressive Buddhist monastery of Po Lin, as well as a Trappist monastery. Lantau's beaches offer an impression of the beauty of the beaches on many of the other of Hong Kong's 230-plus islands.

Hong Kong also has a small and shrinking population of Tanka, fisher-folk who live on boats in fishing towns, such as Aberdeen, Shau Kei Wan, and Cheung Chau.

6. History

Recently discovered artifacts dating back to Neolithic times indicate that Hong Kong has been inhabited for millennia; the earliest modern peoples are thought to have come there from North China in the second millennium B. C. China claimed Hong Kong and its environs about 2,000 years ago, during the Han Dynasty. The Cantonese and later the Hakka settled in the area around the fourteenth century. With its mountainous terrain and lack of fertile soil and fresh water, it was natural that Hong Kong early on became an economic center. With trade came trouble; imperial records mention troops assigned to the area to guard the pearls harvested by the Tanka, while the other two trades plied in Hong Kong appear to have been fishing and opium traffic. The Manchus wiped out the piracy that became rampant by temporarily evacuating Hong Kong in the seventeenth century.

The British, expanding into Asia in the early nineteenth century, recognized the value and strategic importance of Hong Kong's deepwater harbor and began to use it by 1821 to anchor opium-carrying vessels. China's rulers, concerned about the effect of opium on the county's populace, eventually sought to prevent the importation of opium. British resistance to Chinese Imperial control resulted in the first Opium War (1839–42), in consequence of which, Britain gained control of Hong Kong Island. The conflict continued, and less than two decades later the second Opium War erupted (1856–60), after which Kowloon Peninsula and Stonecutters Island were ceded to the British by the Convention of Peking (1860). Hong Kong's 235 outlying islands and the New Territories were later leased to Britain for 99 years by the terms of the Convention of 1898. Hong Kong's previously small population had grown to 120,000 by 1861 and to more than 300,000 at the turn of the century.

Subsequent relations between China and Britain were largely antagonistic for the next few decades. Burgeoning Chinese nationalism nurtured a concomitant xenophobia, and Hong Kong became a refuge for political refugees from mainland China after the Chinese Republic was established in 1912. From 1925 to 1927, the Chinese denied British ships access to ports in southern China. In the face of growing hostilities between China and Japan, beginning with Japan's occupation of Manchuria in 1932 and culminating in the Sino-Japanese War in 1937, China looked to Europe for military supplies and support, and Anglo-Chinese diplomatic relations improved. Hundreds of thousands of Chinese fled to Hong Kong as a result of Japan's invasion of China. Britain strengthened the colony's defenses, but they proved inadequate, and the Japanese took Hong Kong in December, 1941, during World War II (1939–1945). Britain regained control after Japan's surrender in 1945, by which time Hong Kong's population had dropped to 650,000 from its prewar peak of 1.6 million.

Hong Kong's postwar economic recovery proceeded only gradually. A large influx of refugees from the mainland after the Communists took power in Beijing in 1949 added substantially to Hong Kong's population and labor force, but the city's economy was hampered by a U.S. ban on trade with Communist China in 1950. Hong Kong eventually underwent an economic boom by the 1960s, due primarily to heavy foreign investment encouraged by liberal tax policies. Political stability was tested by Communist-inspired riots in 1967, but Hong Kong weathered the storm, and more refugees came from the mainland in the 1970s. However, economic and other ties between Hong Kong and the mainland improved throughout the 1970s and 1980s.

On July 1, 1997, Hong Kong was returned to Chinese sovereignty by Britain according to a 1984 agreement which refined the stipulations of the Convention of 1898. A committee appointed by China from among Hong Kong's civic leaders had designated Tung Chee-hua as Hong Kong's chief executive, and the former British colony became a Special Administrative Region (SAR) under the direct control of China's central committee. Although the 1984 agreement guaranteed the survival of the established legal, social, and economic systems of Hong Kong for the next 50 years, an interim legislative council had already approved restrictions on political rights in Hong Kong before the Chinese resumed control in 1997. Hong Kong's economy suffered along with others in Asia in the subsequent economic recession that affected the region. In the legislative elections in May 1998, most of the open seats were won by pro-democracy candidates.

7. Government

The government of Hong Kong is formulated after the provisions of the Basic Law of the Hong Kong Special Administrative Region (HKSAR), enacted by China's National People's Congress in 1990. The Basic Law ensures "one country, two systems," according to which principle Hong Kong retains its capitalist economy and a large degree of political autonomy while remaining part of China, which provides for Hong Kong's foreign policy and defense.

The previous law code remains in place and is generally that of Britain. A five-member Court of Final Appeal is the highest court, followed by a High Court, which is in turn followed by district, magistrate, and special courts.

The chief legislative body is the 60-member Legislative Council, 20 of which are directly elected. Executive authority rests with the chief executive, who is directly responsible to Beijing and serves a five-year term. While all these positions were initially appointed by the 400-member Provisional, the positions are to be filled by direct elections by the year 2007.

8. Public Safety

The Commissioner of Police, who is directly responsible to the Chief Executive of the HKSAR, is the commander of the Hong Kong Police Force. The commissioner is assisted by two deputy commissioners, one for operations and one for management.

The Hong Kong Police Department consists of the Operations Wing and the Support Wing and is divided into six regions: Hong Kong Island, Kowloon East, Kowloon West, New Territories North, New Territories South, and Marine.

Force Headquarters consists of five departments: Operations; Crime and Security; Personnel and Training; Management Services; and Finance, Administration and Planning (FAP).

In 1998, Hong Kong had an overall crime rate of 1,076 incidents per 100,000 people, and a violent crime rate of 220 per 100,000.

9. Economy

In 1998, Hong Kong had an estimated labor force of over 3.3 million. The labor force can be roughly divided into manufacturing (28 percent), services (46 percent) finance (9 percent) communications and transportation (4.5 percent), construction (2.5 percent), and other (ten percent). With exports valuing some $181 billion, primarily in textiles, electronics, and small manufacturing, Hong Kong's gross domestic product (GDP) was estimated at $175.2 billion. Inflation stood at slightly less than three percent, and unemployment just under five percent.

Imports (primarily in the form of food, raw materials, petroleum, and unfinished manufactured products) amounted to $199 billion. While exports of goods and services accounts for the bulk of Hong Kong's economy, tourism constitutes seven percent of the GDP. Cinematic production is also a significant part in the region's economy. Hong Kong's primary trading partners are mainland China and Japan for import sources and the U.S., China, Britain, Canada, Germany, and Japan as export markets.

With scarce natural resources, Hong Kong imports much of its food. Water is also largely brought in from the Chinese mainland. Only 12 percent of the land is arable, and of that only half is actually cultivated, mostly in the New Territories. Vegetables are the primary crops. Fishing remains a major industry, with an annual harvest of almost 200,000 metric tons of fish. Two percent of the land is under fish ponds.

10. Environment

Consisting of over 200 islands and a peninsula on the southeast coast of China on the South China Sea and covering a total land area of 1,092 square kilometers (422 square miles), Hong Kong is situated around an outstanding harbor offering 60 square kilometers (23 square miles) of deepwater anchorage. The Sham Chun River defines the border with Guangdong Province, and part of Hong Kong is situated in the Zhu Jiang (Pearl River) delta. On the peninsula are Kowloon and the New Territories. Two of the larger islands are Hong Kong Island and Lantau Island, and there are over 230 smaller outlying islands. Much of the terrain is hilly, with the highest peaks being Tai Mo Shan on Lantau at 957 meters (3,140 feet) and Victoria Peak on Hong Kong Island at 550 meters (1,810 feet). Fifty percent of the region is sparse grass and shrub on poor soil. Seven percent is arable land, although about 40 percent of that lies fallow or uncultivated; one percent is under permanent cultivation; meadows and pastures constitute another one percent; forest and woodland, 12 percent; and two percent is under fish ponds.

With annual monsoons—winds from the southwest bearing warm, moist air from the equator—Hong Kong's climate is subtropical, despite its location within the tropics, and has a rainy season from May through August. Temperatures average 22.2°C (72°F), with a low of 15°C (59°F) in February and a high of 27.8°C (82°F) in July. Average rainfall is about 222 centimeters (88 inches). The climate encourages the lush vegetation found in areas that are not urbanized or barren; much of the extant forest is the result of forestation programs since World War II.

11. Shopping

Hong Kong is well known throughout the world as a shopper's paradise, and stores and shops of various kinds can be found on almost every corner. The highest concentrations of places to shop, however, are in the Central District, Causeway Bay, and Stanley on Hong Kong Island, and Tsim Sha Tsui, Mongkok, and Yaumati on Kowloon.

Department stores include both indigenous Hong Kong stores and stores from abroad. The former are the most prominent in the Central District, among them Wing On, Dragon Seed, and Lane Crawford. Elsewhere one can find the British store Marks & Spenser and Japanese stores like Seibu, Isetan, and Mistukoshi. Hong Kong also features a number of large malls that offer a concentration of fine stores, quality restaurants, and upscale boutiques. Also found throughout the region are Chinese product emporia specializing in Chinese goods such as clothing, silks, embroidery, jade, and cloisonné. There are several shopping lanes and street bazaars around Hong Kong, among them East and West Li Yuen Streets, Pottinger Street, Man Wah Lane, and Jardine's Crescent.

12. Education

Schools are divided into primary, junior secondary, and senior secondary levels, with examinations for passage between each. Education through the junior secondary level (for children between the ages of six and 15) is mandatory. About 60 percent of all these schools are private; 30 percent receive some form of government subsidy; and the rest are public. Nearly all of Hong Kong's people have at least a primary school education.

Enrollment in the primary schools in mid-1990s totaled about 470,000 while total enrollment in secondary and vocational schools came to around 520,000.

Colleges and universities in Hong Kong are generally small; the University of Hong Kong (founded 1911) and the Chinese University of Hong Kong (1963), for example, have a combined enrollment of around 14,000. These two schools, together with Hong Kong Polytechnic (1972) and Hong Kong Baptist College (1956), are the main institutions of higher education. There are also students at numerous other schools for vocational, technical, and industrial instruction. The City University of Hong Kong is a new school that opened in 1984, representative of recent efforts to expand the size and the number of institutions for post-secondary education in Hong Kong. Thousands of students also go abroad to pursue their studies.

13. Health Care

Improving health indices and a steady decline in major communicable diseases point to a continued increase in public health, attributable for the most part to efforts to educate the public (such as an anti-smoking campaign) and programs to make preventive medicine and personal health services readily available. Cancer, heart disease, and stroke are the usual causes of death. Moreover, the Hong Kong public generally enjoys a relatively high quality of life. Life expectancy is just under 77 years for men and slightly above 82 for women. A growing elderly population has become an increasing concern.

Hospitals, like the schools, are either private, partly subsidized, or public. Among the region's many hospitals are St. John's and Ruttonjee on Hong Kong Island, Queen Mary and Hong Kong Buddhist Hospitals in Kowloon, and Caritas and Tai Po Hospitals in the New Territories. Social welfare programs are mostly limited to emergency relief, with some provision for old age and disabilities. Hospital services are supplemented by specialized clinics and clinics in outlying areas, some of them on boats, in an effort to provide all citizens of Hong Kong with access to health care.

14. Media

Hong Kong's international commercial importance and strategic location make it a natural communications center. Hong Kong is thus a base of operations for East and Southeast Asian bureaus for a number of news services. Printing and publishing are also significant industries in Hong Kong, and the city has several dozen newspapers and even more periodicals in Chinese and other languages. Among the newspapers are the Hong Kong Daily News, the Sing Tao Daily, and the South China Morning Post. Several television and radio companies serve Hong Kong, among which are Asia Television, Metro Broadcast Corporation, and Hong Kong Commercial Broadcasting.

15. Sports

Hong Kong has two particularly impressive sports venues, the Queen Elizabeth Stadium and the Hong Kong Coliseum, one of Asia's largest indoor stadiums, at which it is able to host international sporting events. Among such events held in the city are the Hong Kong Marathon, the Hong Kong Open Golf Championship, the International Dragon Boat Races, Hong Kong Sevens for rugby, and tournaments of various sports. Horse racing is a Hong Kong passion and can be experienced at two courses, Happy Valley on Hong Kong Island and Shatin in the New Territories. Many clubs around Hong Kong offer excellent facilities where members can play everything from cricket to hockey and tennis.

16. Parks and Recreation

Some 40 percent of Hong Kong's land is devoted to its park system, and its 21 parks scattered throughout Hong Kong and Lantau Islands and the New Territories are well used by the citizens. Tai Chi, hiking, bicycling, kite flying, and picnicking are popular activities for which the ultra-urban people of Hong Kong resort to the wooded areas surrounding the city. Hong Kong's water-front setting also provides ample opportunity for aquatic recreation, such as pleasure sailing, waterskiing, and canoeing, and the city has several boating clubs. Organized recreation is also available at community centers.

Among the larger parks are Hong Kong Park in the Central District, which has a Museum of Tea Ware, a greenhouse, an aviary, gardens, and sports facilities. Victoria Park is built on reclaimed land in Causeway Bay and is a typical urban park. Behind the old Governor's House are the Zoological and Botanical Gardens, which have beautiful manicured gardens, a small zoo, and an aviary. In the New Territories, the MacLehose Trail is a 100-kilometer (60-mile) parkway linking eight separate parks and offering dramatic scenery and coastal views.

17. Performing Arts

Venues for the performing arts in Hong Kong include City Hall (for classical music, theater, and film), the Hong Kong Arts Centre, the Fringe Club (mostly for contemporary and avant garde) in Central District. Queen Elizabeth Stadium (for ballet and pop and orchestra concerts) and the Hong Kong Academy for the Performing Arts (with two theaters for dramatic performances and classical and modern dance) are in Wanchai. The Hong Kong Stadium in Happy Valley is used for pop concerts, as is the Hong Kong Coliseum in Kowloon.

Performance groups include the Hong Kong Philharmonic Orchestra, which performs in City Hall; the Hong Kong Chinese Orchestra, playing traditional Chinese music; some ten troupes performing Cantonese opera; and visiting troupes from the mainland that perform Peking opera. The Hong Kong Dance Company performs Chinese dance and contemporary choreography on Chinese themes. The Hong Kong Ballet performs traditional and contemporary Western pieces while the City Contemporary Dance Company performs more innovative works. The Fringe Club presents drama of various sorts in English and Cantonese, and the Zumi Icosahedron is an avant garde drama and dance troupe.

18. Libraries and Museums

The major higher educational institutions, such as the University of Hong Kong and the Chinese University of Hong Kong, have fairly comprehensive libraries. The city also operates a system of 25 public libraries, including two mobile library units.

Several of the region's museums are located in Kowloon. Among these are the Hong Kong History Museum in Kowloon Park, the Space Museum by the waterfront, the Hong Kong Museum of Art, and the Science Museum. Also in Kowloon is Young's Wax Museum, with figures of personages from Chinese history, such as Confucius and Sun Yat-sen. The Lei Cheng Uk Museum is a burial vault from the Han Dynasty (c. A. D. 25–220). The Sung Dynasty Wax Museum depicts life in a Sung Dynasty village, from about A. D. 960 to 1280. On Hong Kong Island, the Fung Ping Shan Museum, operated by the University of Hong Kong, has a large collection of Chinese and Nestorian antiquities. The Museum of Chinese Historical Relics is located in Wanchai. And the Museum of Tea Ware can be found in Hong Kong Park.

19. Tourism

Some three million tourists visit Hong Kong each year, and the tourist industry accounts for seven percent of Hong Kong's gross national product (GNP). Almost all visitors from abroad need both passport and visa to enter the region. Package tours by which travelers arrive by air or sea are readily available with a variety of options, and both government-run tourist bureaus and private tourist organizations have a wealth of information and services to offer.

Access to various parts of the city from the airport is convenient and relatively inexpensive by both train and bus. Travel within the region is easily accomplished by means of the train systems and the local buses, and water travel on the different ferries is also cheap and widely used. Tourists can experience the ultra-modern in Hong Kong's abundant department stores, boutiques, and malls, or experience something of traditional Chinese culture in places like the Kam Tin Walled Village (Kut Hing Wei) in the New Territories, the Po Lin Monastery on Lantau Island, or the scenic beauty of the outer islands. Soon tourists will also be able to visit Hong Kong Disneyland, scheduled to open on Penny's Bay in 2005.

20. Holidays and Festivals

January-February
Lunar New Year
Birthday of Che Kung
Hong Kong Arts Festival
Hong Kong City Festival

February Yuen Siu (Spring Lantern Festival)

April Ching Ming (Rembrance of Ancestors)
Birthday of Tin Hau
Hong Kong International Film Festival

April/May
Cheung Chau Bun

May
Birthday of the Buddha
Birthday of Tam Kung

June
Dragon Boat Festival (Tuen Ng)
Birthday of Kwan Tai

July
Hong Kong Special Administrative Region Establishment Day

August
Maidens (Seven Sisters) Festival
Yue Lan (Hungry Ghost) Festival

September
Mid-Autumn Festival
Monkey God Festival
Chinese Opera Fortnight

September/October
Birthday of Confucius
Chung Yeung

October
National Day

October/November
Festival of Asian Arts

21. Famous Citizens

William Alison Anders (b. 1933), American astronaut on Apollo 8.

Jackie Chan (b. 1954), actor.

Marguerite Higgins (1920–1966), Pulitzer Prize-winning writer (Korean and Vietnam Wars).

Bruce Lee (1940–1973), actor and martial arts master.

Joan Lorring (b. 1926), actress, best known for her starring role in The Corn Is Green, 1949.

Daniel C. Tsang, American librarian and co-founder of AWARE.

Kitty Tsui, writer, best known for Breathless, 1995, and Words of a Woman Who Breathes Fire.

Lin Yutang (1895–1976), writer and philologist.

22. For Further Study

Websites

CIA World Factbook (Hong Kong). [Online] Available http://www.odci.gov/cia/publications/factbook/hk.html (accessed December 9, 1999).

Daily information bulletin for weather, news and major speeches by government officials. [Online] Available http://www.info.gov.hk/isd/news/ (accessed December 9, 1999).

Hong Kong government. [Online] Available http://www.info.gov.hk/hkfacts/facts_e.htm (accessed December 9, 1999).

Hong Kong government. [Online] Available http://www.info.gov.hk/orgindex.htm (accessed December 9, 1999).

Hong Kong government Works Bureau and the Planning, Environment and Lands Bureau. [Online] Available http://www.wpelb.gov.hk/ (accessed December 9, 1999).

Hong Kong Travel Association. [Online] Available www.hkta.org(accessed De 1999).

Official website of the Hong Kong Special Administrative Region [Online] Available government.http://info.gov.hk/ (accessed December 9, 1999).

PBS: Hong Kong: Lives in Transition. [Online] Available http://www.pbs.org/pov/hongkong/ (accessed December 9, 1999).

Government Offices

Central Government Offices
Lower Albert Road
Hong Kong

Office of the Ombudsman
31/F Gateway Tower 1
25 Canton Road
Tsimshatsui, Kowloon
Hong Kong

Tourist and Convention Bureaus

Hong Kong Tourist Association
548 Fifth Avenue
New York, NY 10036
(212) 947-5008

Hong Kong Tourist Association
35/F Jardine House
1 Connaught Place
Central Hong Kong

Publications

Government Publications Centre
G/F, Low Block, Queensway Government Offices
66 Queensway, Hong Kong

Publications Unit, Census and
Statistics Department
19/F, Wanchai Tower, 12 Harbour Road
Wan Chai, Hong Kong

Books

Cameron, Nigel. An Illustrated History of Hong Kong. Oxford, 1991.

Chan, Ming K., ed. The Challenge of Hong Kong's Reintegration with China. (Hsiang-kang hui kuei Chung-kuo chih t'iao chan / Ch'en Mingch'iu pien chu.) Hong Kong: Hong Kong University Press, 1997.

Cheng, Joseph Y. S., and Sonny S. H. Lo. From Colony to SAR : Hong Kong's Challenges Ahead. Hong Kong: Chinese University Press, 1995.

Dimbleby, Jonathan. The Last Governor: Chris Patten & the Handover of Hong Kong. London: Little, Brown, 1997.

Elegant, Robert. Hong Kong. Time-Life, 1977.

Fosh, Patricia, ed., et al. Hong Kong Management and Labour: Continuity and Change. New York: Routledge, 1999.

Hsiung, James C., ed. Hong Kong the Super Paradox : Life After Return to China. New York, N.Y.: St. Martin's Press, 1999.

Leung, Beatrice, and Joseph Cheng. Hong Kong SAR: In Pursuit of Domestic and International Order. Sha Tin, N.T., Hong Kong: Chinese University Press, 1997.

Lo, C. P. Hong Kong. NY: Belhaven Press, 1992.

McGurn, William. Perfidious Albion: The Abandonment of Hong Kong, 1997. Ethics and Public Policy Center, 1992.

Morris, Jan. Hong Kong. Random, 1988, 1989.

Patten, Christopher. East and West: China, Power, and the Future of Asia. Random House/Times Books, 1998.

Pang-kwong, Li, ed. Political Order and Power Transition in Hong Kong. Hong Kong: Chinese University Press, 1997.

Rafferty, Kevin. City on the Rocks: Hong Kong's Uncertain Future. Viking, 1990.

Rioni, S. G., ed. Politics and Economics of Hong Kong. Commack, N.Y.: Nova Science Publishers, 1997.

Scott, Ian, ed. Institutional Change and the Political Transition in Hong Kong. New York: St. Martin's Press, 1998.

Segal, Gerald. The Fate of Hong Kong. New York: St. Martin's, 1993.

So, Alvin Y. Hong Kong's Embattled Democracy : a Societal Analysis. Baltimore: Johns Hopkins University Press, 1999.

Warner, John. Fragrant Harbour: Early Photographs of Hong Kong. Hippocrene, 3rd ed., 1980.

Welsh, Frank. A Borrowed Place: The History of Hong Kong. Kodansha, 1993.