The Opium trade
By the 17th and 18th centuries, demand for Chinese goods in Europe had created a trade imbalance in Sino-British trade, with silver flowing into China via the Canton System. To solve the trade imbalance problem, the British East India Company began to grow opium in its Indian plantations for import into China. Opium was sold to local drug dealers who brought it into China which was sold for great profits.
The First Opium War and the ceding of Hong Kong
In 1839, the Daoguang Emperor appointed viceroy Lin Zexu to abolish the opium trade. Lin destroyed 20,000 chests of opium in public view in Canton. The British government retaliated by sending its gunboats to put the Qing Government into submission, leading to the Treaty of Nanking 1842. The Treaty provided for indemnity and extraterritoriality to British subjects, ceding of Hong Kong to Britain and opening of 5 treaty ports.
The Second Opium War and the ceding of Kowloon
In the following years, Britain, citing their ‘most favoured nation’ status, demanded opening of all of China to British merchants and legalisation of opium trade. This led to the Second Opium War and the Convention of Peking, which ceded Kowloon to Britain. Gladstone, then Member of Parliament, criticized the wars as he felt “in dread of the judgments of God upon England for our national iniquity towards China.”
The Second Convention of Peking and leasing of New Territories
By the late 19th century, Britain sought to expand its foothold. In wake of China’s defeat in the First Sino-Japanese War, Brtain took advantage of the weak Chinese government and forced the Qing into further submission. Under the Second Convention of Peking, with the exception of the Kowloon Walled City, the New Territories was leased to Britain for 99 years rent-free and became a part of the Crown Colony of Hong Kong.
The Sino-British Joint Declaration and the Basic Law
As the lease of the New Territories expires 1 July 1997, Margaret Thatcher and Deng Xiaoping conducted negotiations in the 1980s on Hong Kong’s future. By the 1980s, China had opened its market to the world, and Britain seized the opportunity. The result was the Joint Declaration 1984, which provided the framework for “One Country, Two Systems” under the Basic Law for Hong Kong’s transfer to sovereignty to China.
During the negotiations, Britain enacted the British Nationality Act 1981 which provided that HongKongers were no longer “British subjects,” but “British Dependent Territories Citizens” with no right of abode in Britain. This runs in stark contrast to the British Nationality (Falkland Islands) Act 1983, which provided full citizenship to Falkland Islands residents. In 2002, 5 years after Hong Kong’s handover, the British Overseas Territories Act 2002 granted full British citizenship to all British Overseas Territories citizens.