Chinese settlement of Hong Kong dates back to the Han dynasty, with traces of habitation reaching back some 6,000 years. Western influence first arrived in the 15th and 16th centuries via the Silk Road, driven by growing European demand for Chinese goods such as tea and silk.
Thanks to its sheltered harbor, Hong Kong was quickly claimed as a European trading post between Europe and Asia — first by the Portuguese, then the British. Britain only fully recognized Hong Kong's strategic value after the First Opium War, following which China was forced to cede Hong Kong Island to Britain. In 1898, the New Territories were leased to Britain for 99 years.
Under British administration, Hong Kong grew into a major banking and insurance center known for its stability. When the Communist Party took power in mainland China in 1949, thousands fled to Hong Kong, making it one of the most densely populated cities in the world.
Deng Xiaoping refused to extend the lease beyond 1997 and insisted on the return of Hong Kong as a whole, not just the New Territories — Hong Kong could not have survived without them, and was already economically deeply tied to the mainland. Negotiations over the handover began under Margaret Thatcher.
Since 1997, Hong Kong has been governed again by China under the "one country, two systems" principle. Its currency remains the Hong Kong dollar.
