Asian political and economic transformation

Hong Kong traders and financiers always had conducted business within complex environments, and since 1860 the imperial powers increasingly shaped the framework of business. Assertive economic and political moves of Japan that threatened Western dominance in Asia and the growing vigor of nationalist movements after 1900 hinted that traders and financiers would confront a transformed environment, although few observers anticipated the swift changes between the late 1930s and the 1950s. When Japan extended its invasion of China in 1937, all pretenses to continued normal business in Asia collapsed. The movement of Japanese military units to Guangdong (Kwangtung) Province and the fall of Guangzhou (Canton) in 1938 unleashed a flood of refugees to Hong Kong that totaled as many as 750,000 between 1937 and 1939, boosting its population to about 1.8 million. Under the harsh occupation of Japanese forces, the number fell to 0.5 million by the end of World War II, but it recovered to 1.0 million in 1946. Battles between the Communist Party under Mao Zedong (Mao Tse-tung) and the Nationalist Party under Jiang Jieshi (Chiang Kai-shek) for control of China set off another surge of refugees that totaled about 345,000 from 1949 to 1951. By the latter date, Hong Kong's population had returned to 1.8 million, setting the floor for subsequent growth.