During British Imperialism in the 1800s, due to its weak military defense and disorganized political structure, China ceded its southeastern island—Hong Kong in the Treaty of Nanking, as the result of losing the Opium War. Since 1842, Hong Kong has been a British colony that adopted English laws and system. As Mainland China develops its economic and political power throughout the 20th century, United Kingdom reverted Hong Kong back to Chinese sovereignty in 1997, ending 156 year’s British ruling. Because of its many differences--political, cultural, and economic—Hong Kong was established as its own special administrative region called HKSAR of China. Although it is officially a part of China, Hong Kong has its own regional
government and laws. In short, Hong Kong has autonomy in all areas such as social and economics, except in foreign policy and national defense.
During the Imperial Period, China practiced the Closed Door Policy, refusing foreign trades. But because Hong Kong was under British rule, it practiced open door policy, participated in international commercial activities. Hence, before rejoining China, Hong Kong has been a significant region for financial services and international trades. It was, in fact, the only channel of communication between Mainland China and the rest of the world. Every international transaction went through Hong Kong.