In 1997, the British Government handed back Hong Kong to the Chinese Government of Beijing. However instead of turning Hong Kong into a communist part of the People's Republic of China (PRC), the Chinese opted to leave Hong Kong as the profitable, stable, economic hub which it had been built into during British Rule.

They invented a system they called 'One Country - Two Systems' where Hong Kong and Macau (a former Portuguese settlement nearby) became part of China, but maintained independence in all things other than (Foreign Affairs and the Military). In so doing, the PRC government granted Hong Kong the special status of 'Special Administrative Region (SAR)'.

Sadly, the day after the handover, the Asian Monetary Crisis hit and Hong Kong, like all or Asia saw tumbling prices. In real estate terms, this put most owners into negative equity. During SARS in 2003, the property market hit it's all time low with many properties down to 35% of their 1997 values. However, since then, the economy has boomed on the back of the Chinese Mainland's success and property prices have rocketed back up, in some sectors, to exceed their 1997 highs. There are however certain pockets which are still only at 40-50% of their 1997 values and these pockets offer huge capital appreciation potential to the astute investor with on the ground contacts and experience.

Overall though, the benefits to Hong Kong as a result of its history are: