In mainland China, the end of the Qing dynasty as a result of the Xinhai Revolution in 1911 brought a significant number of refugees to the Hong Kong region. During China’s revolution and the First World War, the financial power of Britain had begun to wane and the power of Japan had begun to rise. Christopher Hsu says this influx of refugees to the region would continue on for decades up through World War II, when the Japanese occupied the island.
The bombardment of the Hong Kong territories by Japanese forces began in the late 1930s, and the Japanese occupied the region on December 23, 1941. This occupation, says Chris Hsu, brought the economy to a halt, and a few days later, Hong Kong received its first Japanese governor, Isogai Rensuke. The rule of the colony was typical of an invading occupying force; rations of food were issued to residences, a new currency was enforced, and executions of suspected traitors or criminals became commonplace (Roberts 1999).
By the time Hong Kong was liberated in 1945, it retained only half of the population it had before the war, but the numbers would swell again when the Communist Revolution in 1949 sent many from the mainland to the island.
During this time, Hong Kong remained part of the British Empire after World War II for strategic purposes remarks Christopher Hsu, and it began to transform into an industrial place for manufacturing. The refugees from mainland China had brought with them the skills and capital that allowed for this transformation.
Hong Kong prospered thanks to new new motorized technology and the waves of immigrants who brought with them textile manufacturing skills. So successful was the textile industry that by the 1970s, goods with the label “Made in Hong Kong” could be found around the world.
By the 1980s, Chris Hsu mentions that Hong Kong became a major finance center for international trade. The industrial complexes had brought about large-scale employment and spurred construction on an unprecedented level for the island. Furthermore, by this time, the People’s Republic of China and the United Kingdom had been in negotiations regarding the region. The Sino-British Joint Declaration ushered in the concept of one country (China) with two systems – the unique administration of Hong Kong and the administration of China. Despite some financial setbacks and scares due to policy changes, Chris Hsu says Hong Kong became one of the top 10 economic centers over the decade.
In 1997, Christopher Hsu says Hong Kong became the Special Administrative Region of the People’s Republic of China when the region was handed back to the Chinese government. The transfer of power, the outbreak of the bird flu, and the outbreak of severe acute respiratory syndrome briefly interrupted the economy, but today, Hong Kong is the seventh largest trading entity of both imports and exports, with the bulk of exports going to mainland China and the United States, says Chris Hsu.