sell elsewhere at first, and we should lose a few tens of millions a year for this reason, and tailing off to a fairly
small figure.
This assumption, however, seems unrealistic; it is probable that, if only for political reasons, some form of
prohibition on all or part of our imports from Hong Kong would have to be imposed. If these were totally stopped, there would
be some substitut ion, particularly from other Eastern suppliers,
of all types of supply except textiles. We might easily gain a
few tens of millions on import account, at the expense of forgoing
cheap supplies, and thus allowing prices of certain goods to go
up at home.
Thus, the net effect of economic dislocation might be small,
but U.K. prices and therefore costs might rise slightly at a time
when we were finding difficulty in selling our exports.
Hong Kong's trade and payments generally
We have so far been dealing with the bilateral results of
Chinese action which is irrational from our point of view. The attached table sets out in round figures what we know of Hong Kong's trade and financial pattern. There are very large errors and omissions, probably connected with her position as a financial centre and possibly the private use of her currency in various
countries of South East Asia.
For a small colony her trade, at 500 to 600 each way is enormous. In particular, she has a deficit with China which, taken with financial remittances by emigrants and other payments,
means that China earned about 200 a year from Hong Kong's position as a manufacturing and trading centre. This is over a third of China's total earnings of foreign exchange, and has been growing
rapidly although their growth may in any case now be slower.