Perched on the southeastern tip of China, Hong Kong is a city of contrasts: a place where East meets West, old meets new, and modern skyscrapers and huge shopping malls coexist with colonial buildings and traditional Chinese temples.
The territory was a former British crown colony from 1842 until July 1, 1997, when sovereignty was handed over to China. It is now formally known as a Special Administrative Region (SAR) of the People's Republic of China, ruled under a special policy of "One Country, Two Systems", largely self-governed and with a high degree of autonomy in all matters except foreign affairs and national defense. Under the Basic Law, Hong Kong's mini constitution, the city will maintain its own legal, economic and political systems for at least 50 years after the handover, or until 2047, when full control reverts to the Chinese government.
Hong Kong is divided into four distinct regions: Hong Kong Island, the Kowloon peninsula, the New Territories and Outlying Islands, covering a total area of 1,104 sq km (426 sq miles).
The central business district is located on Hong Kong Island, which is also the financial and historical center. Hong Kong Island is separated from the Kowloon peninsula by the historically important Victoria Harbor, one of the world's most renowned deepwater ports.
North of Kowloon is the largely rural New Territories, Hong Kong's residential hinterland. A large portion of the area is reserved as parkland, but since the 1970s, the government has made efforts to modernize other parts of it by building a number of new towns, such as Tuen Mun and Tsuen Wan, to accommodate the population overspill from Hong Kong Island and Kowloon.
There are 262 outlying islands in Hong Kong, with the largest being Lantau Island, home to the international airport and the Hong Kong Disneyland theme park. Most of the other islands are uninhabited, although some such as Lamma, Cheung Chau and Peng Chau have seen the growth of small communities who commute to the city by ferry for work.
With its strategic deepwater harbor and proximity to the mainland, Hong Kong was, for many years, regarded as the capitalist gateway to communist China. And because of its unique position, what was once a backward fishing village grew into a thriving business and financial center, with one of the world's busiest international ports.
Hong Kong has been ranked as the most free-economy in the Index of Economic Freedom for 14 consecutive years, and is characterized by free trade, an advantageous tax regime and minimal governmental intervention. As one of the world's leading centers for international finance and trade, the city boasts the largest number of corporate headquarters in the Asia-Pacific region.
Although many of the outlying islands and mountainous regions are uninhabited, Hong Kong is one of the most densely populated cities in the world. The total population is over 6.9 million, with about 3.4 million people, or almost half of the population, residing in Kowloon and on Hong Kong Island.
The vast majority of its population is of Chinese descent (95%). Although foreigners only make up 5% of the population, they comprise over 50 nationalities, forming a colorful and highly visible group despite their small numbers.
A significant number of Indian, Pakistani and Nepalese have made Hong Kong their home, and many have families that have lived in the city for several generations. The largest groups of recent, non-ethnic Chinese immigrants are Filipinos and Indonesians, most of whom are employed as domestic helpers.
Among the expatriates, the greatest numbers are found among the American, British, Australian, Canadian, Japanese and Korean communities, many of whom are working in the city's commercial and financial sector.