what does that mean since july 1 1997 when the united kingdom transferred the sovereignty of hong kong to china hong kong has maintained a separate political and economic system from china democratic ish and capitalist and a separate currency the hong kong dollar hkd 
hong kong retains independent executive legislative and judiciary powers in all matters other than military defense and foreign affairs english and chinese are the two official languages 2hong kong s economyhong kong was ranked as the world s freest economy in the heritage foundation s index of economic freedom from the index s inception in 1995 until 2020 when singapore knocked it off the top spot to number two however the following year in 2021 the index stopped including hong kong and macau due to an increase in china s influence 34in 1990 milton friedman wrote that it was perhaps the best example of a free market economy the service economy in hong kong is characterized primarily by low taxation near free port trade and a well established international financial market service economy here means an economy that is not industrial or manufacturing based but is instead based on financial services health and human services hospitality information technology etc 5using its political and economic autonomy hong kong has positioned itself as the place where international and chinese businesses find common ground it is also considered the principal financial center in china as a result more than 9 000 companies in hong kong have parent companies located outside of hong kong in 2023 6this democratic government and the free market have been successful to some extent it s the world s 43rd largest economy in 2022 with a population smaller than the city of tokyo at 7 35 million in 2022 hong kong had a gdp of 359 8 billion in 2022 giving it the world s 28th highest gdp per capita at 48 983 in 2022 78910hong kong and china s tensionshistorically china has had considerable incentive to refrain from interfering in hong kong s political and economic systems at the transfer of sovereignty in 1997 hong kong with a population of 6 5 million at the time had an economy one fifth the size of the chinese economy which had a population of over 1 2 billion 1112this is no longer the case over the past 20 years hong kong s economy has stagnated changing very little in makeup with gdp growth slowing and inequality rising significantly during the same period china became an economic superpower as of 2022 hong kong now accounts for just 2 of chinese gdp 11some think that the greatest risk to hong kong s autonomy is political and business elites in the region ceding it to the liaison office to remove political tensions from the region and return hong kong to an economic city this may prove a poor decision though as a marriage of business and government has proven counterproductive in hong kong leading to an increase in conflicts of interest and cronyism not to mention a non responsive government that refuses to broaden its tax base or lower property taxes and has excluded political parties from democratic participation all of this has led to a public perception of the hong kong sar government as not as legitimate as it once was 13given these recent trends the liaison office the people s republic of china representative in hong kong has been taking steps to meaningfully increase its influence and clout in the region interfering in both domestic affairs and elections for example the liaison office bought hong kong s largest publishing house removing titles critical of the communist party and lobbied for hong kong s 2017 chief executive carrie lam in 2022 lam stepped down 1415