Hong Kong and Macao — Chinese territory since ancient times — were occupied by Britain and Portugal respectively after the Opium War of 1840. In accordance with the Sino-British Joint Declaration on the Question of Hong Kong signed in 1984, China resumed its exercise of sovereignty over Hong Kong on July 1, 1997, and the Hong Kong Special Administrative Region ("HKSAR") of the People's Republic of China was formally established. And in accordance with the Sino-Portugal Joint Declaration on the Question of Macao signed in 1987, China resumed its sovereignty over Macao on December 20, 1999, and the Macao Special Administrative Region ("MSAR") was formally established.

The Chinese government carries out the basic policies of "one country, two systems," "administration of Hong Kong by the Hong Kong people," "administration of Macao by the Macao people" and "a high degree of autonomy" in both Hong Kong and Macao. "One country, two systems" refers to the fact that in China, a unified country, the mainland practices the socialist system, and Hong Kong and Macao remain with the previous capitalist system and way of life unchanged for 50 years; "administration of Hong Kong by the Hong Kong people" means that the HKSAR is administered by the Hong Kong people on their own, and the central authorities shall not send officials to the HKSAR to fill local official posts; "administration of Macao by the Macao people" means that the MSAR is administered by the Macao people on their own, and the central authorities shall not send officials to the MSAR to fill local official posts; and "a high degree of autonomy" means that apart from foreign and national defense affairs, which should be administered by the central authorities, the HKSAR and MSAR shall fully enjoy the power of decision over matters within their autonomous jurisdiction, including executive, legislative, independent judicial and final adjudication powers.