After the Japanese surrender, Chinese civilians — many of whom had moved into the Mainland during the war — returned at the rate of almost 100 000 a month. The population, which by August 1945 had been reduced to about 600 000, rose by the end of 1947 to an estimated 1.8 million. In 1948-49, as the forces of the Chinese Nationalist Government began to face defeat in civil war at the hands of the Communists, Hong Kong received an influx unparalleled in its history. Hundreds of thousands of people — mainly from Kwangtung (Guangdong) Province, Shanghai and other commercial centres — entered Hong Kong during 1949 and the spring of 1950. The population has continued to grow, reaching 4 million by 1971, 5 million by 1980, 6 million by 1994, and now nearing 7 million.

After a period of economic stagnation caused by the United Nations' trade embargo on China arising from the Korean War, Hong Kong began to industrialise. No longer could Hong Kong rely solely on its port to provide prosperity for its greatly increased population. The rise of Hong Kong's manufacturing sector began with the setting up of textiles mills. The mills gradually expanded their range of products and, by the 1960s, they included man-made fibres and garments. During this decade textiles and clothing made up about half of domestic exports by value.

Although Hong Kong has become an increasingly service-based economy over the past 20 years, textiles and clothing currently constitute over 40 per cent of domestic exports by value. Electronics, chemical products and jewellery are also major export items.

Over the years, the manufacturing sector has gradually moved from one concentrating on simple, labour-intensive products to one focusing on sophisticated, high value-added products. Taking advantage of the abundant supply of land and labour in the Pearl River Delta, industrialists have expanded their production bases across the boundary while retaining their headquarters in Hong Kong. This mode of operation has contributed to economic development in the region and facilitated the transformation of Hong Kong into a services centre.

In 1966, the year the Cultural Revolution was launched on the Mainland, tension mounted in Hong Kong. During 1967, this developed into a series of civil disturbances, affecting all aspects of life and temporarily paralysing the economy. But, by the year's end, the disturbances were contained and the community continued its tradition of peaceful progress.

Hong Kong continued to expand its role as an entrepôt, particularly trade with China. Coupled with tourism, this led to vast improvements in communications, with an increasing number of people entering Mainland China from or through Hong Kong, the natural gateway, each year.

To keep pace with the development, the Government places strong emphasis on improving and expanding infrastructure. As a result, Hong Kong has been transformed into a modern city with efficient road and rail links, and first-class port and airport facilities. New highways have opened up previously remote areas, the railway networks are being expanded, and a new international airport has been in operation at Chek Lap Kok since 1998.

Accommodating about 47 per cent of Hong Kong's population, the new towns in the New Territories have eased the pressure on developable land in Kowloon and on Hong Kong Island. Current and planned projects continue to spur the economy, creating job opportunities and enhancing the environment for the community.

The development of Hong Kong's economic base has enabled the public sector to increase spending on housing, education, social welfare and health over the years — from $104.7 billion in 1996-97 to an estimated $140.8 billion in 2006-07.

Hong Kong's public housing programme started with an emergency measure to rehouse some 53 000 people made homeless overnight in a squatter fire on Christmas Day 1953. It has developed into a comprehensive programme that encompasses a wide range of rental and home ownership flats with self-contained facilities.

The key objective of the Government's subsidised housing policy is to provide assistance to low-income families who cannot afford private rental accommodation. The Hong Kong Housing Authority's primary responsibility is to build public rental flats to help families in need gain access to adequate and affordable housing and to assist the Government in maintaining the average waiting time for such flats to around three years.

The Government has been investing heavily in education to enhance Hong Kong's competitiveness in a knowledge-based and globalised economy. Free and compulsory primary and junior secondary education is provided to every student up to the age of 15 years. Senior secondary and tertiary education is also heavily subsidised. It is the Government's policy that no student is deprived of education for lack of financial means.

At present, all Secondary 3 students from public sector schools who are able and willing to continue with their studies may receive subsidised Secondary 4 education or vocational training.

The Government and non-governmental organisations have made major social welfare advances in the past decade, with the Government's total spending on social welfare increasing from $17.6 billion in 1996-97 to an estimated $36.2 billion in 2006-07. At the same time, social services have developed from providing emergency relief into today's diversified and comprehensive network.

Hong Kong's public and private health care service providers together provide comprehensive health care of a high standard to the community. This is demonstrated by Hong Kong's major health indicators such as life expectancy at birth and infant mortality rate, which are now among the best in the world. Other important factors have been improvements in socio-economic conditions, education, housing, sanitation and nutrition and the introduction of a comprehensive childhood immunisation programme by the Government. With a high polio immunisation rate, coupled with a high level of vigilance, Hong Kong was certified polio-free in 2000.

The health care system has adapted to cope with changing social needs and circumstances. For instance, the Department of Health has gradually evolved from a provider of primary care services into a health advocate, focusing on promotion and preventive health care services while maintaining its status as the authority on health and related regulatory matters. Recent endeavours include the introduction of a cervical screening programme, anti-smoking campaigns, and on-going prevention and health promotion programmes on HIV/AIDS.

In the wake of the Severe Acute Respiratory Syndrome (SARS) outbreak in 2003, the Government took a series of measures to strengthen its public health infrastructure. One milestone was the establishment of the Centre for Health Protection (CHP) under the Department of Health in June 2004. By strengthening the surveillance system and response capacity for infectious diseases, CHP aims to achieve effective prevention and control of diseases in Hong Kong in collaboration with the local community, the mainland authorities, the World Health Organisation and other partners around the world.

A comprehensive system of labour legislation has been developed to provide for employees' benefits and protection, employees' compensation, occupational safety and health. Free employment services are provided to help job-seekers find work and employers to recruit staff. The Employees Retraining Board provides quality retraining courses and services to the unemployed and potentially unemployed in order to enhance their employability and meet the needs of employers and the Hong Kong economy.