position in the free money market and the reasonable abundance of cheap labour has great attraction to industrialists throughout the world. Taxes in Hong Kong in respect of companies runs at the rate of 15% of gross profits and depreciation is allowed up to 20% per annum. A single person in Hong Kong earning 7,000 Hong Kong dollars per year pays no tax and a married person earning 14,000 dollars per year pays no tax. After this income tax is on a graduated scale or one can opt to pay an overall 15% of one's gross taxable income. One takes the choice of whichever is the lesser of the two. Rents are particularly high in Hong Kong and it appears that a person earning about 20,000 Hong Kong dollars per year would pay in rent something in the region of 800 Hong Kong dollars per month. Converted to sterling it would seem that a person earning £30 per week would be paying about £15 per week rent. Strangely enough, having regard to the fact that Hong Kong must be one of the cheapest places in the world to buy any commodity whatsoever, these excep- tionally high rents were most surprising.
We raised with Mr. Purvis and his department the question of orderly marketing of textiles, knitwear and clothing but here again it was his opinion. that there should be even more liberalisation of trade. When we asked him what would be his position should Taiwan and South Korea commence to rupture the present Hong Kong markets, would he still have the same philo- sophy, he declined to answer, saying this was a bridge that would have to be crossed when oppositions became apparent. It was quite obvious that whilst Hong Kong was able to export vast quantities of textile and clothing to the developed countries, there was no thought in the Government department of accepting any form of orderly marketing. There did not seem to be the realisation of the position Hong Kong could be in over the next few years if other much lower cost countries attacked the markets which Hong Kong now considers her own particular province.
FACTORY VISITS
During our time in Hong Kong we had the opportunity of visiting a number of factories, covering a broad picture of the industry. We did not see any Ladies Hose factories and we understand that no ladies hose is produced in Hong Kong at the present time.
The first factory we visited manufactured outerwear. The majority of the garments were knitted on hand flat machines but there were a few power flat machines in operation making trimmings and some fabric for a small amount of cut and sewn outerwear. The garments produced were of good quality and 80/85% of the production from this factory was exported, principally to the U.S.A. The production throughout this company was only fair. They seemed to have a large number of operatives who were doing no useful work and one anticipated that productivity could be increased by 15/20% without instituting any change in the method of production but purely by streamlining the labour employed. This is an unusual factor, almost a paradox, since we were assured by manufacturers and Government agencies that there was an extreme shortage of labour in the colony. If an approach was made in this company to utilise the operative labour more efficiently there could be a drastic reduction in the unit
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