In its early days, Hong Kong was regarded as an uninviting prospect for
settlement. A population of about 3 650 was scattered over
20 villages and hamlets, and 2 000 fishermen lived on board
their boats in the harbour. Its mountainous terrain deficient in fertile
land and water, Hong Kong possessed only one natural asset — a fine
and sheltered anchorage. Largely the reason for the British presence,
which began in the 1840s, Victoria Harbour was strategically located on
the trade routes of the Far East, and was soon to become the hub of a
burgeoning entrepôt trade with China.
Hong Kong's development into a commercial centre
began with British settlement in 1841. At the end of the 18th century,
the British dominated the foreign trade at Canton (Guangzhou) but found
conditions unsatisfactory, mainly because of the conflicting viewpoints
of two quite dissimilar civilisations. The Chinese regarded themselves
as the only civilised people and foreigners trading at Canton were subject
to residential and other restrictions. Confined to the factory area, they
were allowed to remain only for the trading season, during which they
had to leave their families at Macau. They were forbidden to enter the
city or to learn the Chinese language. Shipping dues were arbitrarily
varied and much bickering resulted between the British and Chinese traders.
Yet, there was mutual trust and the spoken word alone was sufficient for
even the largest transactions.
Trade had been in China's favour and silver flowed
in until the growth of the opium trade — from 1800 onwards —
reversed this trend. The outflow of silver became more marked from 1834,
after the East India Company lost its monopoly of the China trade, and
the foreign free traders, hoping to get rich quickly, joined the lucrative
opium trade which the Chinese had made illegal in 1799. This led to the
appointment of Lin Zexu (Lin Tse-hsu) in March 1839 as special Commissioner
in Canton with orders to stamp out the opium trade. A week later, he surrounded
the foreign factories with troops, stopped food supplies and refused to
let anyone leave until all stocks of opium had been surrendered, and dealers
and ships' masters had signed a bond not to import opium on pain of execution.
Captain Charles Elliot, RN, the British Government's representative as
Superintendent of Trade, was shut up with the rest and authorised the
surrender of 20 283 chests of opium after a siege of six
Elliot would not allow normal trade to resume until
he had reported fully to the British Government and received instructions.
The British community retired to Macau and, when warned by the Portuguese
Governor that he could not be responsible for their safety, took refuge
on board ships in Hong Kong harbour in the summer of 1839.
The British Foreign Secretary, Lord Palmerston, decided
that the time had come for a settlement of Sino-British commercial relations.
Arguing that, in surrendering the opium, the British in Canton had been
forced to ransom their lives — though, in fact, their lives had
never been in danger — he demanded either a commercial treaty that
would put trade relations on a satisfactory footing, or the cession of
a small island where the British could live under their own flag free
An expeditionary force arrived in June 1840 to back
these demands, and thus began the so-called First Opium War (1840-42).
Hostilities alternated with negotiations until agreement was reached between
Elliot and Qishan (Keshen), the Manchu Commissioner who had replaced Lin
after the latter was exiled in disgrace over the preliminaries of a treaty.
Under the Convention of Chuenpi (Chuanbi) signed on
January 20, 1841, Hong Kong Island was ceded to Britain. A naval landing
party hoisted the British flag at Possession Point (in the vicinity of
present-day Hollywood Road Park in Sheung Wan) on January 26, 1841, and
the island was formally occupied. In June, Elliot began to sell plots
of land and settlement began.
Neither side accepted the Chuenpi terms. The cession
of a part of China aroused shame and anger among the Chinese, and the
unfortunate Qishan was ordered to Peking (Beijing) in chains. Palmerston
was equally dissatisfied with Hong Kong, which he contemptuously described
as 'a barren island with hardly a house upon it', and refused to accept
it as the island station that had been demanded as an alternative to a
'You have treated my instructions as if they were
waste paper,' Palmerston told Elliot in a magisterial rebuke, and replaced
him. Elliot's successor, Sir Henry Pottinger, arrived in August 1841 and
conducted hostilities with determination. A year later, after pushing
up the Yangtze River (Chang Jiang) and threatening to assault Nanking
(Nanjing), he brought the hostilities to an end by the Treaty of Nanking,
signed on August 29, 1842.
In the meantime, the Whig Government in England had
fallen and, in 1841, the new Tory Foreign Secretary, Lord Aberdeen, issued
revised instructions to Pottinger, dropping the demand for an island.
Pottinger, who had returned to Hong Kong during the winter lull in the
campaign, was pleased with the progress of the new settlement and, in
the Treaty of Nanking, deviated from his instructions by demanding both
a treaty and an island, thus securing Hong Kong.
Five Chinese ports, including Canton, were also opened
for trade. The commercial treaty was embodied in the supplementary Treaty
of the Bogue (Humen) in October 1843, by which the Chinese were allowed
free access to Hong Kong Island for trading purposes.