T
tatto
the co
try severely disrupted normal trade with the Colony. Although the value of imports from China grew (from 19.12% of all imports in 1921 to 37.95% in 1939) during the Inter- War years, exports to China fell more sharply (from 64.65% of all exports in 1921 to 14.83% in 1939) and the entrepot trade declined in importance relative to the whole trade of the Colony as Hong Kong sought other markets.
(G B Endacott "A History of Hong Kong", Oxford University Press, 1964).
5.
The relative decline in the importance of the China trade continued after the Second World War and the trend
was accelerated after the outbreak of war in Korea. Chinese involvement in the Korean war provoked a United Nations embargo (with which Hong Kong had also to comply) on trade with China in a wide range of strategic goods. In December 1950 the United States imposed an almost total embargo on trade with China, which also fell with particular weight on
important mukeats for the re-import of goods originating from China, Hong Kong The Colony adapted to 'these changed circumstances by radically restructuring and expanding industry and diversifying its international trade. This reconstruction was aided by an enormous influx of Chinese into Hong Kong (the Colony's population swelling from 1.6 million at the end of 1946 to 2.36 million by the end of 1950); some brought capital and industrial expertise with them, others simply their labour.
r
6. The problem of ensuring adequate supplies to Hong Kong was overcome by a system involving the issue of essential supplies certificates to distributors and factories using the raw materials. China thus remained the principal source of all Hong Kong's imports for the period from 1949 up to 1968, when China was overtaken by Japan (in 1977 Japan supplied 23.7% of all imports and China 16.6%). China continued to supply nearly half of Hong Kong's total food imports (in 1977, 45%).
7. Hong Kong's value to China: the balance of trade since
1949. In the first years of the People's Republic,
Hong Kong was a considerable drain on China's foreign exchange. The unfavourable balance of trade gave China a deficit of some HK$596 million in 1950 and $817 million in 1951 (source: "China Trade Prospects and US Policy"
*