FROM TINY SEAPORT TO WORLD FINANCIAL GIANT
Hong Kong. How did this small city-state of 7.3 million people go from having a per-capita income of only a few hundred dollars per year to a per capita income that is equal to that of the United States in only 50 years?
Hong Kong became a British colony in 1842, and the adjacent "New Territories" were leased for 99 years in 1898. In 1997, Hong Kong was returned by the British to China, with an agreement that it would become a Special Administrative Region (SAR) -- "one country, two systems."
Hong Kong retained the British legal system, most individual liberties, and a high degree of local autonomy, except for foreign policy and defense. The amount of democracy has been limited -- with the British serving as the ideal benevolent dictator and the Chinese as a somewhat less benevolent dictator for the past 17 years.
Hong Kong is about as close to the ideal free-market capitalist model that you can find on the planet -- which came about largely by accident.


