The purpose of this Research Report is to examine the past and the present performance of Hong Kong’s economy the British administration and its prospects beyond 1997, when full sovereignty of the colony will revert back to China. The Report begins with an analysis of the environmental factors that are vital to present day success. With the favourable environmental conditions -the advocacy of free enterprise, free trade, and non- intervention in the market place - and the remarkable achievement attained so far, the Report argues that there is no economic reason why• present, prosperity will not be sustainable ill the future .
However, the economic well-being of the colony is very much influenced by the changing conditions of Chinese politics. As Hong Kong approaches 1997, there are concerns, from both local and foreign investors, as to whether Hong Kong will be allowed to retain its self-acclaimed laissez-faire economy after 1997. This Report advances some strong arguments as to why present structures will be allowed to continue after 1997. On that basis, that is, given the likelihood that China will honour the Sino-British Joint Declaration consummated in 1984 (regarding the continuity of Hong Kong's present social, monetary, financial, economic, judicial and other systems, which are the key ingredients of the present-day success of the colony), we can be comparatively optimistic about the colony's future prospects.