ABSTRACT
This chapter begins with an examination of the nature of British colonialism in Hong Kong. It looks at Hong Kong's postwar economic development, highlighting structural changes in the economy. The chapter considers the reasons for Hong Kong's economic success, examining in particular the interaction between local business leaders and the state in fostering economic growth. It discusses critical political issues, including the colony's stability and the impact of the planned transition to Chinese rule in 1997. British colonial policy in Hong Kong can best be described as conditional laissez-faire with stability as its overriding concern. Since the late nineteenth century Hong Kong's bankers have regulated competition among themselves by gentlemen's agreements, fixing the prices of a wide range of banking services, including exchange rates. The rhetoric of the Cultural Revolution in the People's Republic of China from 1966 to 1969 fanned nationalistic, anti-colonial flames in Hong Kong.
