Sino-British Joint Declaration
On December 19, 1984, the Chinese and British governments signed the Sino-British Joint Declaration and three relevant annexes on the issue of Hong Kong. As stipulated in the declaration, China would assume sovereignty over Hong Kong from Britain on July 1, 1997. The declaration also stated the decision to set up the Hong Kong Special Administrative Region (HKSAR), to be led directly by the central government, which would take charge of the region's foreign and defense affairs after the handover.
The HKSAR would enjoy a high degree of autonomy, ranging from government administration, legislation and independent jurisdiction to final adjudication. In line with the declaration, most of the basic laws in Hong Kong would remain in place after the handover. The declaration also proclaimed that "local inhabitants" would make up the HKSAR government and that the lifestyle would not be changed. In addition, Hong Kong would remain a free port of trade and the international financial center and would continue to function with an independent taxation system. The policies would be stipulated in the Basic Law of Hong Kong Special Administrative Region issued by the National People's Congress and would remain unchanged for a period of 50 years following the handover.
The Chinese government stipulated its basic policies toward Hong Kong in Annex I, while the accountabilities of the Sino-British Joint Liaison Group were regulated in line with Annex II. Moreover, rules and regulations for a committee set up between China and Britain to handle the land and property problems in Hong Kong were stated in Annex III.