The Treaty of Nanking, which was signed in 1842, marked the conclusion of the First Opium War between the British Empire and the Qing dynasty of China. The treaty's provisions were comprehensive, establishing conditions that favored British trade and diplomatic status. One of the key outcomes was the cession of Hong Kong Island to Britain in perpetuity, which was significant in establishing a British foothold in East Asia. On June 26, 1843, this cession officially came into effect, formally elevating Hong Kong from a barren island to a prominent center of commerce and governance under British rule. The British established a colony there, which would eventually evolve into a major hub for trade between the East and West.

The British administration set up a system of governance, a legal framework, and infrastructure that drastically transformed the island. Hong Kong's strategic location made it an essential maritime link, and by institutionalizing British rule, it opened floodgates for British merchants, leading to a dramatic increase of economic activity. The city began to flourish as a trading port, attracting various nationalities and becoming a melting pot of cultures.

Furthermore, the importance of Hong Kong was amplified due to its role as a gateway for trade with China. It became a focal point for British interests in Asia, serving not only as a commercial center but also as a base for further expansion into China. The effectiveness of British colonial policies in shaping infrastructure, governance, and trade relations laid down a legacy that would influence Hong Kong’s development for generations to come.