In June 1840, First Opium War between China and Britain broke out. On January 26th, 1841, Britain seized Hong Kong. On August 29th, 1842, government of Qing Dynasty was forced to sign Treaty of Nanking with Britain, formally ceding Hong Kong.

In September, 1982, Deng Xiaoping proposed the principle of "one country, two systems" to solve the Hong Kong issue when he met with Britain Prime Minister Margaret Thatcher. Under this principle, Hong Kong would be administered by Hong Kong people as a highly autonomous region, and Hong Kong's capitalist system and life style would not be changed for 50 years. After many rounds of consulation, on December 19th, 1984, China and Britain reached an agreement, and signed the Sino-British Joint Declaration on the Issue of Hong Kong, which declared that "Chinese government will resume exercise of its sovereignty over Hong Kong from July 1st, 1997, and at the same time Britain will return Hong Kong to China."

On a midnight of June 30th, 1997, the hand-over ceremony was held solemnly at Hong Kong Convention and Exhibition Centre. At zero hour on July 1st, national flag of the PRC and the regional flag of Hong Kong Special Administrative Region (HKSAR) were raised. Jiang Zemin, president of the PRC, solemnly declared resumption of exercise of Chinese sovereignty over Hong Kong according to Sino-British Joint Declaration on the Issue of Hong Kong, and founding of the HKSAR. Then Tung Chee Hwa, the first Chief Executive of the HKSAR, took the oath of office.

The one and a half centuries of British colonial rule of Hong Kong came to an end, and Hong Kong finally returned to motherland.