ABSTRACT
This chapter examines from a geographical point of view the impact of Hong Kong's sovereignty change on China as well as China's influence on Hong Kong. The return of Hong Kong to China is important because of its political implications. To China, Hong Kong is an important asset politically and economically. It is fortunate that China's future development potential is very high, despite the recent currency crisis, which seems to have had a lesser effect on China than other countries in the region. The major shift in the economic policy of China after Deng Xiaoping came to power in 1978 provided Hong Kong with another opportunity for economic advancement. Hong Kong's future development is closely tied to China's economic development. Hong Kong is an excellent entrepot port, a function that the British wanted Hong Kong to serve when the colony was founded in 1843 with the main objective of trading with China.
