most vivid example of a near laissez- faire economic system, one in which government consciously restricts its economic activities. The retention of the free enterprise system depends heavily upon the fact of continued status. Moreover, the United King- dom bears most of the defence burden for Hong Kong-the local citizenry can conduct their economic affairs with little regard for the provision and cost of defence measures. The poli- tical realities that plague independent countries rarely preoccupy Hong Kong,'
Turning to more tangible items, the most obvious value of the UK to HK is as a large and growing export market. In the immediate post-war days when Hong Kong was no more than an entrepot, China was our major market. Other far eastern countries, notably what was then Malaya and Singapore, also played a prominent role. The USA was a large customer taking somewhat more than 10 per cent of exports. The UK accounted for less than five per cent. But virtually all our trade then was in what today we term re-exports.
The picture was quickly to change with the outbreak of the Korean War and the US embargo on trade with China and UN controls on the sale of strategic goods. These events coincided with the establishment of a
textile industry here and the general development of Hong Kong as a manufacturing centre.
The United Kingdom was to play a key role in the development of Hong Kong industry. HK had no home
market to support industry and thus without the UK as a ‘home market' for Hong Kong goods during the 'fifties, there may well have been no Hong Kong industry as we know it to-day. New pattern
In 1947, Hong Kong's exports (really re-exports') to the UK were worth $38.21
$38.21 million. 1949 saw them pass the $100 million mark. Ten years later a completely new pat- tern had emerged. The significance of markets in the Far East, including of course China, had declined, al- though Malaya/Singapore continued to be important. The USA and the UK between them now accounted for well over 40 per cent of total exports, and it was only at the very end of the decade that sales to the USA, which had proved very sluggish during the mid-fifties, overtook those to the UK. Setting the seal of official approval on what had occured, Government trade figures now began to distinguish be- tween 'domestic exports' and 're-ex- ports'.
The growth pattern in exports to the UK continued throughout the 'sixties, with slight 'downs' in 1965 and 1969. By 1963, the UK was taking over 22 per cent of domestic exports, and al- though its relative importance as a market has declined since then, the ab- solute volume sold there has continued strongly to increase, with last year's figure of $2194 million being an all time record.
The Commonwealth link between HK and UK, together with long ex- perience of mutual trade, are of course the obvious and main reasons for
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