For some of the tea in China – how Hong Kong became British and what happened when it did

It’s not entirely unreasonable to say that Hong Kong owes its whole existence to the voracious British appetite for tea. Here’s how that’s done. In the early nineteenth century Britain was importing massive amounts of tea from China but was struggling to find a viable export. That is, until they turned up with opium, produced in their colonies in India.

Opium was destructive in Chinese society. As many as ten million became seriously addicted, and the government sought to ban the drug as a result. Britain was not happy about this, not happy at all, because it put the tea trade at risk. So Britain invaded.

In the opium wars that followed Britain was victorious and able to extract concessions from China. They got access to more Chinese ports and, crucially, were ceded sovereignty to a rocky outcrop on the edge of the Pearl River Delta called Hong Kong. In later concessions they were granted Kowloon and a ninety nine year lease on the New Territories.


A colony built as a trading port

We’ve written before about how one explanation for the different levels of prosperity in former colonies is whether the institutions in the colony were designed to support settlement or extraction. Hong Kong’s an interesting case because it fits neither category. Instead, its purpose as a colony was as a trading post and commercial centre in the Far East. True to form, the institutions setup here match that function.

It doesn’t seem like the British invested much effort in making Hong Kong a British society like they might if planning settlement. Plenty of schools taught in Chinese and immigration from mainland China was welcomed at various times. In contrast, in the three years that the Japanese occupied Hong Kong in World War Two they made Japanese language and culture classes in schools compulsory.

The British setup only the institutions that they needed to create an effective trading hub and commercial centre, not to model Britain. There was an independent judiciary and the rule of law – investors love all that. But Hong Kong’s governors were appointed by and from London right through until the British withdrew in 1997. The governors appointed Hong Kong native officials, but no one was elected. Ironically, the British only started towards democracy in the context of transition to Chinese rule. Pleasingly Hong Kong has managed to develop a staunch pro-democracy movement regardless.

Though it didn’t suffer the indignities of being an extraction colony, the British clearly saw Hong Kong as a means to an end, and set it up accordingly. This was enough to facilitate something of a modern economic miracle in terms of Hong Kong’s development, but they’ve left it as an odd child from an institutional perspective.

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