Hong Kong was forever held by China but was ceded to Britain in 1842, when China’s Qing dynasty was defeated in the First Opium War. Hong Kong has been a central figure in international trade, from its earliest days as a British colony. Chinese refugees flooded the city in early 20th century, and Hong Kong put them to work at manufacturing units as labor.
As mainland China strengthened into a manufacturing and business industry, Hong Kong transformed into a service-based economy and an international financial market. Hong Kong became a Special Administrative Region of the People's Republic of China on 1 July 1997. China allows the city to enjoy its freedom of speech, its capitalist system, independent judiciary and rule of law, while holding the reins.