Hong Kong had been steadily growing into a major international financial center, as well as an important gateway into China for the West.
However, following a surge in GDP after the Chinese takeover in 1997 and a spurt in 2000, Hong Kong’s economy started to lag and unemployment shot to nearly 8 percent.
The economic ties between the island and the mainland got a boost with the introduction of a mini free trade agreement called the “Closer Economic Partnership Agreement” in 2003. The cozy trade agreement was mutually beneficial and Hong Kong residents seemed to appreciate the preferential access they received in the mainland Chinese market.
Still, a congressional analysis in 2003 of Hong Kong trends expressed concern that the relationship could result in an undermining of the “high degree of autonomy” promised by the Special Administrative Region’s government.
