Located at China's doorstep along the Pearl River Delta, Hong Kong has long served as a bridge between mainland China and the West. More than 150 years of British colonial rule (beginning in the 1840s) endowed the city with a uniquely liberal economy, a Western regulatory system, and strong rule of law that differentiate it from many other parts of the Asia-Pacific region. These characteristics helped to transform the city into a leading reexport and financial center in the past five decades, building on connections into the mainland's lucrative market and industry. Nearly 8 million people reside in the special region's 687 square kilometer (427 square mile) territory, making it the world's most densely populated city with a high level of ethnic diversity.
Under the Sino-British Joint Declaration, Hong Kong was guaranteed economic and political autonomy under the "One Country, Two Systems" principle for 50 years after the handover to China in 1997. But years of attempts by Beijing to increase its political control over the city and the consequences of deeper economic integration have eroded that status. This, coupled with the city's deep-rooted socio-economic issues, contribute to a rising tide of Hong Kong nativism manifesting as pro-independence advocacy, particularly among the younger generation. As the city struggles to diversify its economy beyond the financial and retail industry, its growing political polarization and radicalization combined with concerns about Beijing's encroachment could threaten Hong Kong's economic prospects at a time when mainland cities and the rest of the Asia-Pacific region are preparing to seize new opportunities.