20 January 1841: Britain takes possession of Hong Kong

On this day in 1841, Hong Kong island was ceded to Britain following the Chuenpi Convention, along with a resumption of the opium trade.

1997 Hong Kong Handover Flags
(Image credit: Richard Baker / In Pictures via Getty Images)

The 1830s came as a rude shock for China. For centuries, the Chinese empire had been the preeminent power in the region, where it boasted the best bureaucracy, and the latest technology. It had got used to being revered. So when a band of uncivilised Westerners came knocking on the palace gates, the Chinese could be forgiven for thinking all was as it should be. The problem was the Chinese world view was badly out of date.

By the 19th century, China's glory days had long since passed. By contrast, Europe was revelling in the industrial revolution, and Britain was busy carving out a global empire. To do that, Britain needed China or rather, what it had to offer. True to the stereotype, the British had developed a sweet spot for tea. So much so, in fact, that tea imports accounted for 16% of customs revenue. It's been said that 83% of the Royal Navy's running costs could be met by levying taxes on tea alone. Britain felt it had to address this unequal balance of trade. So, it searched its new territories in India and came up with just the export opium.

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Chris Carter
Wealth Editor, MoneyWeek