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Nature and Volume of Trade
X
The defence contribution has always been a sensitive issue in
our relations with Hong Kong since the Colony has been the
only dependent territory to have made regular and substantial
payments; and the 1966 negotiations were carried through by
Mr Fred Lee (then Secretary of State) with great difficulty.
The last agreement expired in March, 1971, and we are still
in the process of negotiating a new contribution with the Hong
Kong Government. The negotiations have been protracted and
difficult and there is a possibility that the reserved powers
under the Colony's constitution may have to be used in order to
secure a contribution acceptable to Her Majesty's Government.
27.
TRADE AND INDUSTRY
Hong Kong's prosperity prior to 1950 rested on the
entrepot trade, principally with China. With the advent of
a Communist Government in China this trade dwindled rapidly
and in its place industry has assumed a dominant role. In
1949 Hong Kong's total trade (imports and exports) was £317m:
in 1970 it was £2,265m. Since Hong Kong has to export to
live it has long been the policy of the Government to maintain
free entry for all goods from abroad other than a few items on
which there is a tariff for revenue purposes.
28. Textiles still account for a high though declining
percentage of total exports (about 45%). Well over a half of
Hong Kong's exports go to three markets (United States,
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/United Kingdom