BACKGROUND NOTE
من
Of the one and a half million people at work in Hong Kong, 576,000 are in the manufacturing industries. Unemployment is among the lowest in Asia and in an expanding economy the increasing demand for labour by industry tends to the constant improvement of wages. Thus Hong Kong wage rates are high by Asian standards and in general wages and conditions of work second only to those in Japan among
Asian countries.
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A
The Hong Kong economy makes remarkable progress but even so it will be a long time before it will be able to support conditions to compare with those in Europe. Any direct comparison of Hong Kong wage rates with those in developing countries can be misleading. Among the reasons is the difference in the general tax structure. Direct taxation in Hong Kong is considerably lower and the system
of allowances such that few industrial workers are liable to the equivalent of income tax. There is no purchase tax and the cost of consumer goods is not inflated by tariffs. Excise duties are limited. Otherwise Hong Kong is duty free and most of the basic food stuffs which enter into a worker's cost of living are imported from China at prices which have been remarkably stable over the
past ten years.
The questioner uses the standard of a 48 hour week. As he knows from the answer to a Parliamentary Question a year ago, this is not yet universal, although a considerable proportion of Hong Kong industries have already adopted a 48 hour week. A four year phased programme of reduction of hours of work of women and young persons to 48 hours a week in all industries came into operation with effect from December 1967. Of course any too sudden increase in wage rates imposed on the economy could only lead to the disruption of industry. The prosperity of the Colony and a state of full employment depends on competitive exports.