Stepping into the 20th century, Hong Kong’s transport, infrastructure, and systems became more established after about 60 years of development. Due to the constant warfare among warlord cliques in the Chinese mainland, a lot of mainlanders migrated to Hong Kong with capital and technology. In addition, overseas Chinese came back to Hong Kong for business. All these favourable factors helped boost entrepot trade in pre-war Hong Kong. As Britain became less prominent in the world and new markets such as Japan, the United States, and Southeast Asia emerged, the foreign trade in Hong Kong became more diversified and internationalised. In the aspect of industry, Hong Kong reached its first climax of pre-war industrial development between the 1920s and mid-1930s due to changes in the world situation and increased investment. Chinese-owned factories gradually broke the Western dominance in Hong Kong. It reached another climax of pre-war industrial development when the demand for military supplies surged between 1937 and 1941. As the economy grew, there was remarkable development of society and culture. The official opening of the University of Hong Kong created a vibrant atmosphere among intellectuals and the publishing industry boomed. The film industry started to grow when people valued more about sports at the meantime. They added colours to pre-war Hong Kong society.

The economic development in Hong Kong was amid large-scale labour movements. The Hong Kong Seamen’s strike from January to March in 1922 and the Canton-Hong Kong strike from June 1925 and October 1926 were marked in the history of world labour movement. Although the movements struck Hong Kong’s economy, they did not hinder the city’s overall development. As society progressed, patriotic Hong Kong Chinese supported the Chinese mainland in resisting the Japanese invasion. They set up various groups to aid the war through donation, organising medical assistance teams and services corps, and assisting refugees.