1990s in Hong Kong
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The 1990s in Hong Kong was defined by the 1984 Sino-British Joint Declaration, a statement that paved the way for a series of changes that would facilitate the transfer of sovereignty from the United Kingdom to the People's Republic of China (PRC).
In 1997, the sovereignty of Hong Kong was transferred to the People's Republic of China. Colonial administration in Hong Kong was ended in June 30, 1997, and Hong Kong became a special administrative region of the PRC at midnight July 1.
Soon afterwards, the Asian financial crisis broke out and the economy of Hong Kong fell from its peak. The end of the 1990s found Hong Kong in a state of discontent.
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Politics
Before the handover
Various mediating measures took place in the run-up to 1997 to prepare for the handover.
On April 4, 1990, the Hong Kong Basic Law was officially ratified as the constitutional document to be used, after the handover, of the Hong Kong Special Administrative Region (HKSAR).
Following the Tiananmen Square protests of 1989, citizens feared the Chinese government would not keep its promise of autonomy for Hong Kong, which had been guaranteed for 50 years by the Hong Kong Basic Law. To provide a lasting weight against intervention from the PRC, democratic measures were introduced. The first direct Legislative Council (LegCo) elections, for 18 out of the 57 seats, took place in 1991. All except one of these seats were won by pro-democracy candidates.
Chris Patten was appointed as Governor in July 1992 after the loss of his seat as Member of Parliament for Bath in the British election, replacing Sir David Wilson. Patten sought to increase democracy in Hong Kong before the handover through a series of measures that affected the election processes of both legislators and municipal officials.
The Central Government reacted angrily and retaliated with attacks against Patten and threats to the careers of pro-democracy politicians and officials. It avoided cooperation on business contracts that went beyond 1997, though abandoned such an approach in 1994 when it approved the planned Chek Lap Kok Airport. In 1994, the PRC announced that it would terminate the LegCo following the handover and introduce a provisional legislative council, after Patten's proposal for the formation of the 1995 LegCo was passed in the council. The pro-democracy parties and independent members of the council, including the Democratic Party, denounced this provisional legislative council as illegal. The provisional legislative council operated before the handover from Shenzhen.
In 1996, the first Chief Executive, Tung Chee Hwa was elected in Beijing-controlled elections.
The handover
At midnight on July 1, 1997, in the handover ceremony held at the new wing of the Hong Kong Convention and Exhibition Centre, Wan Chai North, the Union Jack and the flag of the Crown colony were lowered, and the flags of the Hong Kong Special Administrative Region and China were flown. This marked the transfer of sovereignty of Hong Kong from British colonial rule to Chinese rule.
Guests participated in the handover ceremony included HRH Prince Charles, President of the People's Republic of China Jiang Zemin, the last Hong Kong Governor Chris Patten, and Tung Chee Hwa, the first Chief Executive of Hong Kong SAR.
After the handover, Hong Kong officially became a special administrative region of the PRC, with the new post of Chief Executive, first held by Tung Chee Hwa, replacing and succeeding the former position of governor, last held by Chris Patten.
After the handover
The highest law in the special adminsitrative region is the Basic Law. It is the constitutional document of the territory which grants and guarantees a high degree of autonomy in Hong Kong whose people enjoy executive, legislative and independent judiciary powers.
Economy
The Hang Seng Index (HSI) was volatile after the takeover. It rose from over 10,000 in the middle of 1996 to a height of 16,820.3 on August 7, 1997. Speculators bet that there would be an influx of hot money from Mainland China to boost the economy of Hong Kong. Any stock linked to the Chinese economy or which had successful dealings in China had great potential.
In July 1997, the Thai government's decision to float the Thai Baht triggered a currency crisis that spread throughout Asia. One by one, the New Taiwan Dollar, Korean Won, and Indonesian Rupiah tumbled in price. All the other Asian stock markets declined in value.
Since the HSI looked so strong, the investors of Hong Kong were stubborn and did not realize the Hong Kong stock market was also vulnerable.
The Linked Exchange Rate System of the Hong Kong Dollar presented another vulnerability. Investors withdrew money from the Hong Kong banking sector, thus boosting interbank rates. Accordingly, the HSI dropped from 13,473 on October 20 to 10,426.2 on October 23. October 23, 1997 was regarded as a Black Friday as HSI once dived down to 9766.7.
The HSI bottomed at 6544.79 on August 13, 1998, declining 62% from peak to bottom. To attempt to salvage the stock market of Hong Kong, the government injected HK$120 billion from the Exchange Fund to buy blue-chip HSI stocks.
The HSI rebounded to 8,000 level in about two weeks time and rose steadily in the coming year. The trend of HSI can be found here
Technology stock bubble
In 1999, Hong Kong stock market experienced further volatility. Technology stocks in American and European stock exchanges skyrocketed. There were large merger and acquisition deals between old-economy companies and new-economy companies, such as the AOL Time Warner merger.
The tech stock whirlwind landed on Hong Kong as well. In the middle of 1999, Richard Li, son of Hong Kong tycoon Li Ka Shing, put his company, Pacific Century Cyberworks, on the Hong Kong Stock Exchange by back-door listing.
Richard Li claimed that the company would inject the PPC (an interative TV project) to the listed company. The prestige of Richard Li as the son of "Superman Li" caused many retail investors to bid up the stock.
The share price of Pacific Century Cyberworks (stock code: 1186) rose from dozens of cents to its peak of $28.5 on the Valentine's Day of 2000. At the peak, it announced a merger with Hong Kong Telecom. The seen-as-successful merger brought HSI to its historical high of 18,301 points.
As the tech stock bubble burst in early 2000, the share price of the new merged company PCCW (stock code:8) dropped by 98% in the coming year. PCCW had negative equity (as a multi-billion write-off of goodwill) and suffered from HK$80 billion debt for a couple of years. PCCW had to sell its core business to Australian telecommunication company Telstra to ease its financial hardship.
Migration
Emigration
Before the handover, many Hong Kong residents were apprehensive of the future of Hong Kong as part of a communist state, which had cracked down on a student-led democratic movement in 1989. In 1990, the outflow of people reached a peak of 62,000 people in that year, or about 1 % of the population. It was 66,000 in 1992, 53,000 in 1993, and 62,000 in 1994.
Many renowned tycoons in Hong Kong, such as the Shaw family, left Hong Kong for fear of adverse effects to the economy after the handover to communist PRC rule. Many Hongkongers left Hong Kong and emigrated to Britain through the British Nationality Selection Scheme. Besides migrating to Britain, comparable numbers of families moved to Australia, Canada, and the United States.
Immigration
The outflow of people was counter-balanced by a strong inflow of people from the following sources:
- Legal immigrants from mainland China - The quota for legal immigrants from mainland China was gradually increased from 75 to 105 immigrants per day in 1994, and 150 in 1995. The increase in the daily quota aimed at regulating the flow and preventing a sudden influx after the handover.
- Foreign professionals - These were people who came to Hong Kong with employment visas. They were not subject to quota restrictions with an exception made for the professionals from mainland China.
- Foreign domestic workers - The number of foreign domestic workers increased steadily. It grew from less than 9,000 per year before 1987 to 28,000 in 1992 and 32,000 in 1993. The majority of them were women from the Philippines, with substantial numbers of people from Indonesia and Thailand.
- Imported labour - With a sharply declining fertility rate, an aging population, and a growing economy, Hong Kong faced a shortage of labour in the second half of the 1980s. The government began to introduce labour importation schemes which allow employers to apply for permits to bring in technicians, craftsmen and operators. In 1994, a total of 11,000 places were made accessible.
- Illegal immigrants -A total of 35,500 illegal immigrants from mainland China were arrested and deported in 1994. The number had decreased to about 44,000 in 1993.
- Returnees - The official estimate of people who have returned to Hong Kong after acquiring foreign passports or residence rights is about 12 %.
Entertainment
From 1991 to 1998, a small group, who became known as the 'Four Celestial Kings' were dominating the music market. They were: Jacky Cheung, Andy Lau, Leon Lai and Aaron Kwok. In the early stages in their career, Jacky Cheung and Leon Lai sang songs with Japanese melodies, but in the early to mid-1990s there was a public call for originality in local music. In 1993, the radio broadcasting company Commercial Radio, announced that it would play only locally-written music. The purpose was to encourage local musicians to write their own lyrics. Mark Lui was a popular composer by the late 1990s.
After 1997, popular music and television incorporated ingredients from Taiwan and mainland China to a bigger impact than before. An example of this was the television drama titled My Fair Princesses. It was produced in Taiwan and starred mainland actress Vicky Zhao. The television drama was broadcast in Hong Kong in 1999 by Asia’s Television’s Home Channel and became popular among the Chinese diaspora worldwide. The theme song from the drama was "A Lovely Girl" sung by Vicky Zhao in Mandarin. Another example of a popular mainland pop star was Faye Wong. She was born in Beijing and began singing in Cantonese, but later sang in both Mandarin and Cantonese as her career grew.
The Hong Kong film industry underwent several changes in the 1990s, especially with the emergence of the mo lei tau culture, which became synonymous with comedian Stephen Chow. Some critics said that the filmmakers were making those films in order to alleviate the tension in Hong Kong society due to concern about the handover.
External links
- Hong Kong Tourism Board: Discover Hong Kong website
- Office of Public Sector Information: British Nationality (Hong Kong) Act 1990 (c. 34)
- UNESCO: Migration Issues in the Asia Pacific
- Asian Research: Hong Kong's current issues
- Asian Research: Beijing handles Hong Kong's politics
- Asian Research: Foreign investment in Hong Kong
Categories
History of Hong Kong