Before Hong Kong became a Crown colony, there were about four thousand Chinese inhabitants living in various villages on the Island.  Most of them were engaged in fishing and farming.  

It is safe to assume that when Charles Elliot chose Hong Kong Island as the Crown Colony, he had considered the deep-water harbour north of the island, sheltered by hills on both sides, an advantage for shipping, and was better than ports like Whampoa and Macao. (Chiu, 1937)(Morgan, 1958)

 

Since the cession of Hong Kong, there was an influx of Chinese from the mainland.  As illustrated in the government statistics of 1841, the number of Chinese inhabitants in the colony rose to around 12,000.  To the Foreign Office, the sharp increase in the number of Chinese inhabitants would be beneficial to the development of trade in the newly founded colony:

 

… if an island on the east coast of China be ceded to the British Crown for use as a commercial station by British subjects, the Chinese Mandarins (merchant and inhabitant) of all the towns and cities on the coast of China will be authorized by the Chinese government to come freely to that island, without hindrance or molestation, for the purpose of trading with the British subjects settled there. (Foreign Office to Captain Elliot, 3 February 1841, quoted in Chaillery-Bert. J. (1894). The British at Hong Kong. Arthur Baring Brabant trans. London: Archibald Constable & Co., p. 17.)

 

Sir Henry Pottinger, the first Governor of Hong Kong, also remarked that, “the treaty of [Nanjing] had opened up a new world to [British] trade so vast that all the mills of Lancashire could not make stocking stuff for one of its provinces.”(Sargent, 1907)

 

Since then, Hong Kong began to play an important role in the maritime trade between China and Britain.  After 1860, with the inclusion of Kowloon Peninsula and the Stonecutters into the Colony under the Treaty of Tianjin (1858) and the Convention of Beijing (1860), the role of Hong Kong became increasingly important.