Pattern and Volume of Trade
Resistance to Exports
SECRET
would ensue if this matter were to be raised again during the currency of the present agreement.
TRADE AND INDUSTRY
29. Hong Kong's prosperity prior to 1950 rested on the entrepot trade, principally with China. With the advent
of a Communist Government in China this trade dwindled
rapidly and in its place industry has assumed a dominant role. In 1949 Hong Kong's total trade (imports and exports) was £317m: in 1967 it was £1,202m. Since Hong Kong has
to export to live, the only industries worth having are
those whose products can be sold in the domestic marke&
without protection or which can be exported without
subsidies. Hong Kong has therefore remained true to the traditions established when it was an entrepot, i.e., no
tariffs other than those which are designed solely to
produce revenue, and free ingress for other goods from any
quarter of the globe.
30.
Textiles still account for a high though declining percentage of Hong Kong's total exports (about 45%) with woollen knitwear now an expanding sector (especially in the United States and Western Germany). Well over a half of Hong Kong's exports go to three markets (United States, United Kingdom and Western Germany) and sales to some other
countries in Western Europe are also rapidly increasing. Despite this export success story, however, it must be emphasised that Hong Kong consistently imports more than it exports and this is the mechanism through which it imports outside capital.
31. The success of Hong Kong exports has led to counter pressure from industries in importing countries for import restrictions on Hong Kong goods. This pressure first developed in the field of cotton textiles and exports of such products to a number of countries are now restricted by agreements negotiated under the provisions of the G.A.T.T. long term cotton textiles arrangements. There are also quota restrictions on exports of cotton textiles to Britain.
/ 32.