In 1839, Britain invaded China to crush opposition to its interference in the country’s economic, social, and political affairs. One of Britain’s first acts of the war was to occupy Hong Kong, a sparsely inhabited island off the coast of southeast China. In 1841, China ceded the island to the British with the signing of the Convention of Chuenpi, and in 1842 the Treaty of Nanking was signed, formally ending the First Opium War.
Britain’s new colony flourished as an East-West trading center and as the commercial gateway and distribution center for southern China. In 1898, Britain was granted an additional 99 years of rule over Hong Kong under the Second Convention of Peking. In September 1984, after years of negotiations, the British and the Chinese signed a formal agreement approving the 1997 turnover of the island in exchange for a Chinese pledge to preserve Hong Kong’s capitalist system. On July 1, 1997, Hong Kong was peaceably handed over to China in a ceremony attended by numerous Chinese, British, and international dignitaries. The chief executive under the new Hong Kong government, Tung Chee Hwa, formulated a policy based on the concept of “one country, two systems,” thus preserving Hong Kong’s role as a principal capitalist center in Asia.