The First Opium War broke out in 1840. The British forces landed on Hong Kong Island on 25 January 1841 and held a flag-raising ceremony the next day, marking the establishment of Hong Kong as a free port. The British Crown appointed governors to administer Hong Kong, and established the Hong Kong government, the Executive Council, and the Legislative Council. The Executive Council was the highest consultative body while the Legislative Council was the law-making body. Both Councils were presided over by the Hong Kong Governor and their members were appointed by him. Although the Hong Kong Governor held significant power as the two Councils only served as consultants in policy-making, the judiciary was independent of him.
After Hong Kong became a free port, there was considerable economic development. Merchants from different countries enjoyed free access to Hong Kong and zero-tariff policy doing business here. In light of booming industry in major capitalist countries in Europe and the U.S. after the Industrial Revolution, the opening of Suez Canal and the operation of the Eurasian submarine cable, there was a surge of merchandise exporting from the West to the expansive China market through Hong Kong. Hong Kong gradually emerged as an important entrepot in the Far East because of these favourable conditions.
The Hong Kong government once imposed racially discriminative policies such as curfew on the Chinese population. Later, the social status of the upper-class Chinese gradually improved when Chinese merchants rose to economic power. Regarding education, Hong Kong adopted Western academic structure after becoming a free port. The Government Central School (now Queen’s College), the College of Medicine, and the University of Hong Kong were renowned local academic institutions in early years. Western-style education nurtured talents and patriots with revolutionary thoughts and new thinking for Hong Kong, which helped promote China’s development.
The British rule in Hong Kong was once challenged. In April 1899, villagers in the New Territories resisted the British takeover. Although the uprising was suppressed, the British knew they could not rule in a high-handed way. They thus stabilised the ruling over the whole Hong Kong territory resorting to the carrot and stick approach in the New Territories.