Japan took full control of Hong Kong on 25 December 1941 and set up the ‘Governor’s Office of the Occupied Territory of Hong Kong’ the following February with Isogai Rensuke as the Governor. Japan saw Hong Kong as a supply line for its army and governed the city high-handedly. Adopting the policy of ‘using Chinese to subdue Chinese’ to govern the territory, it established the ‘Rehabilitation Advisory Committee’, the ‘Chinese Representative Council’ and the ‘Chinese Co-operative Council’ to reinforce its control by sowing division between Hong Kong citizens. The Japanese authorities also implemented a number of harsh military measures: supplies were requisitioned and military banknotes were over-issued, with the result that the local economy stalled and people led lives of utter misery. The Japanese occupation saw a constant shortage of supplies, while food became increasingly scarce. The authorities rationed everyday items and food: to begin with, every person received a mere 6 tael and 4 mace (about 240 grams) of rice every day, but this allocation was later reduced, making a miserable situation even more hopeless for many people. Corpses of people who died of starvation littered the streets.

With resources scarce during the occupation, the Japanese authorities were unable to cope with the huge demand for food and supplies or with growing social problems, and they subsequently founded the Repatriation Committee (later renamed the Repatriation Office) to force Hong Kong residents to return to their hometowns in China; many were also sent to work on the development of Hainan Island. From 1.6 million before the city fell to Japan, the population had plunged to 0.6 million by 1945 when the Japanese forces surrendered.