SECRET
32.
Resistance to Hong Kong's developing exports of other products is also growing and much of this arises from
exaggerated fear of the threat posed by Hong Kong. There is a limit to what a community of less than four million
people can produce. Wages have risen rapidly in recent years and already Hong Kong textile exporters are meeting stiff competition from countries such as Korea and the Philippines where wages are lower. The British market, which takes approximately 17% of Hong Kong's total domestic exports, is important to the Colony, not only because of its
size but also because of the benefits of Commonwealth
preference. These provide Hong Kong industry with the opportunity to try out new products in a domestic market which
is lacking in Hong Kong.
33. The maintenance of present standards of living, let alone any improvement in those standards, depends on the ability to expand industrial production and exports. These in turn depend partly on the extent to which industry can improve quality and productivity and diversify both its products and
its markets. Since the Hong Kong economy rests on the opportunity to trade it will always be very vulnerable in the event of any general down-turn in world trade or the adoption of more protectionist policies by countries constituting its major markets. For these reasons Hong Kong depends heavily on the maintenance of the most favoured nation principle in
trade and other G.A.T.T. rules and she values highly her rights
under the G.A.T.T. and the Long Term Arrangement on cotton
textiles.
Employment and Unemployment
LABOUR CONDITIONS AND RELATIONS
34. Of the 11⁄2 million people at work in Hong Kong, 576,000 are in the manufacturing industries. In 1967 the registered and recorded number of persons employed in factories and industrial undertakings amounted to 444,000. Unemployment, which in 1961 was estimated at about 11% of the economically
active labour force is among the lowest in Asia. Hong Kong wage rates are high by Asian standards and in general, wages and conditions of work in Hong Kong are second only to those in Japan amongst Asian countries.
/ 35.