FEDERATION OF HONG KONG INDUSTRIES
Address by the Chairman, Dr. the Hon. S. Y. Chung at the 9th Annual General Meeting held on 25th July, 1969
BRITISH
COMMISSÄKER
29 JUL 1969
121/4/1
The Report and Accounts have been in your hands for some days now, and with your permission, I will take them as read.
Our meeting today is overshadowed by two major but different events. Firstly, we are all exhilarated at man's conquest of space and the great strides forward it will mean to the uplifting of man's moral and material well-being. The Federation joins the millions of people around the world in congratulating all concerned in this great breakthrough of science and technology for the benefit of humanity,
What a pity it is that the second event does not give us the same sense of elation. I refer to the decision of the United Kingdom Government to impose a levy on our textile exports to the U.K. amounting to 17% in the case of garments. This, as a contrast to the effects of the first mentioned event, can only mean a slowing down in our economic development and the rate of progress in the social betterment of the people of Hong Kong.
This unilateral action by the U.K. Government is scurvy treatment, especially in view of the fact that Hong Kong has, without exception, been most conciliatory in considering the wishes of the United Kingdom Government in relation to textile matters, often to our own detriment. We can only read in this action that past concessions on our part are unappreciated and, notwithstanding the fact that we are a Colony of the United Kingdom, we merit no special consideration. We might in fact say that we merit even less consideration than some totally foreign countries, i.e. those in the EFTA group.
It appears, then, that we are neither fish, flesh nor fowl insofar as our relations with the United Kingdom are concerned. When international commitments and our financial reserves are involved, the U.K. Govern- ment asserts the authority its special relationship with Hong Kong provides, and "persuading" us to adopt measures which are not always in the overall interests of our community, enters into agreements on our behalf. When, however, it comes to trade, Hong Kong is to be considered as a complete out- sider. We are all too well aware of how Portugal, a country which has no ties with the United Kingdom beyond those provided by membership of EFTA and which has labour costs lower than ours, has gained an extra-favourable position in the U.K. textile market, largely at our expense. The ten-year period of sacrifice on our part in accepting quantitative restriction on our textile exports to the U.K. has benefited, not the U.K. textile industry but that of Portugal which will be able, under EFTA agreements, to continue to export to the United Kingdom, duty free. So, to what purpose, we must ask, is the United Kingdom causing distress and hardship to Hong Kong?
For, let there be no mistake, the imposition of the tariff will cause distress and hardship to a sizeable group in the community. It must be understood
that the nature of the controls imposed on factories manufacturing for the U.K. market under the Com- monwealth Preference scheme, some of which are major concerns, will mean 100% effect. The so- called two-and-a-half-year period of grace will not assist them to adjust to change or to diversify their markets because the current control system requires total isolation of stock and production for the Com- monwealth Preference market from that of other markets. It is a case of "all or nothing" if a factory wants to participate in the Commonwealth Preference scheme. There will not be opportunities for a gradual change over from the U.K. market to alternative markets or to alternative (non-Preference) products for the U.K. market.
What a pity it is that we have this shadow hanging over us today. Up to this point, our position and prospects for the year ahead were rosy.
The overall industrial performance of Hong Kong is most pleasing, and you will have noted that the 26% increase in exports of locally-manufactured goods in 1968 over 1967 was a record percentage increase for the past 10 years. Based on the popu- lation of 4,000,000, the total value of $8,428 million worth of exports of Hong Kong-made goods works out to $2,100 per capita, placing Hong Kong among the top ten such performers in the world. As we are now producing higher-quality goods, much more of this increase in exports has been in terms of value rather than in volume.
It is indeed fortunate that, although lacking in size and almost totally devoid of any material re- sources, Hong Kong is rich in the resource of human endeavour. But I would like to stress again, as I have done before, that we must take heed of our very progress and prepare for the future by properly developing our only available resource, that of our people, so that they will fit into Hong Kong's role We must ensure that as a manufacturing centre.
our manpower moves correspondingly with our in- creasing industrial sophistication, at all levels. We need engineers and technologists. We need more technicians. We need still more craftsmen and skilled workers.
It is encouraging that some of the entreaties of the Federation for the past several years in the area of technical education are now beginning to bear fruit. We can look forward to a greater emphasis being placed by our educational administrators on the need for more technical education at the post-second- ary level. But there is as great a need, on a more massive scale, for training facilities in the basic skills at the post-primary level. Such facilities offered, say, to youths up to the age of 17, would enable them to engage in gainful employment in industry and would be economically beneficial as well as go towards easing a potentially explosive social and political problem.
Given the facilities, I am certain, there would have been many youths now usefully working in our both factories, which are sorely in need of labour skilled and operative. The solution of Hong Kong's youth problem is inter-twined with our industrial and social development, and its neglect will only lead us on to a dangerous situation from which, I fear, we might not be able to extricate ourselves as we have fortunately been able to do in the past.
Recognizing the need to go ahead in the field of product development, the Federation last year launched its Product Design Service and further expanded its Product Testing and Certification Service, with the support of the Sir Sik-nin Chau Foundation for Industrial Development which, as you know, has been made possible by generous contributions from commerce and industry.
The Hong Kong Industrial Design Council, formed as a consequence to give advice on these matters, has held meetings, and the Design Service itself started functioning early this year. We have already conducted a very successful design consultancy session by intro- ducing our manufacturers to a well-known industrial The enthusiasm with which designer from overseas. this was received has prompted us to arrange for the conducting of other sessions in the very near future.
The importance which we attach to such services in the overall planning and development of industry may be gauged from the fact that Mrs. Susan Yuen, until recently our Executive Director, is now devoting her entire energies to mapping out the future acti- vitics and special projects of the Federation.
Hong Kong's record of economic growth is equal- led by very few. It is even looked upon by some others for emulation. But a system which has been successful in the past, and in which things have been allowed, by and large, to work out for themselves, may not be an applicable blueprint for the future.
If there is to be progressive industrialisation and let there be no doubt that this is essential insofar as Hong Kong is concerned makeshift techniques simply will not suffice in our long-term interest and should give way to imaginative planning with the objective of achieving maximum utilisation and co- ordination of all the various component factors. Given the right direction, as well as environment, I
am confident the inherent ability of the people of Hong Kong will see us through to even better times ahead.
Ladies and Gentlemen, your Committee have put in yet another year of selfless devotion to duty in the promotion of industrial development, and I hope that you will feel that they have served you well.
I wish to express my very sincere thanks to our Deputy Chairman, Mr. M.S. Cumming, and all the members of the General Committee for their guidance and support throughout the year of activities.
My thanks go also to all our members, whose support has made it possible for us to work for in- dustry; to our Treasurers, Messrs. Lowe, Bingham and Matthews, for their very willing services; to our Auditors, Messrs. Wong, Tan & Co., and our Legal Advisers, Messrs. Lo and Lo. I must express our ap- preciation to Government for its encouragement and financial support, and to the officials of its various departments, in particular those of the Commerce & Industry Department and the Labour Department, for their understanding and co-operation.
Appreciation is also extended to all the other bodies which offered their co-operation, and I name the Chinese Manufacturers' Association, the Hong Kong General Chamber of Commerce, the Indian Chamber of Commerce, the Hong Kong Trade De- velopment Council, the Hong Kong Productivity Council and the Employers' Federation of Hong Kong.
You will also wish me to specially thank Mrs. S. Yuen who, since the inception of the Federation, has served us and Hong Kong so outstandingly as the Executive Director. We owe much of our success to her. She has now relinquished the post to Mr. Y. H. Chen, and I am sure that you will join me in We are, however, wishing Mr. Chen every success. fortunate not to lose the services of Mrs. Yuen alto- gether, as she has agreed to serve as our first Director for Planning and Development, for at least two years. Finally, my thanks to all members of the Secretariat for their dedication.
With these remarks, Ladies & Gentlemen, I have pleasure in proposing the adoption of the Report and Accounts for the year 1968.