COMMERCE
Chapter 5.
Hong Kong's prosperity has been built up through its development as the commercial clearing house for goods destined for, and exported from, the Canton delta in particular, and South China in general. It produces relatively little within its own borders. Before the normal pattern of trade was disrupted by the outbreak of the Sino-Japanese War in 1937, over 40% of the Colony's total trade was conducted with China, and it is true to say that in the long run, the trade of the Colony must continue to be linked with that of China, whatever temporary shifts in pattern have been brought about by the unsettled conditions prevailing in that country during the past few years. Since the end of the Pacific War, the Colony's trade with China has fallen steadily, and in 1948 amounted to less than 20% of the whole. To compensate for this, the Hong Kong merchant with his traditional adaptability to changing conditions, has developed new markets in the countries to the south, in particular with Malaya and Siam.
Hong Kong has maintained its traditional position as a free port, in spite of post-war economic developments in other parts of the world. Trade controls in Hong Kong are kept to the minimum, an essential for a port that depends on its entrepôt trade for its prosperity, and such controls are mainly confined to those made necessary either by inter- national obligations in respect of scarce commodities or foreign exchange, or by the need to protect Hong Kong's own supplies of scarce commodities. In so far as is consistent with the Colony's obligations to the sterling area, exchange control makes no attempt to enforce surrender of foreign exchange, where such an attempt might merely cause the exchange to be diverted elsewhere.
The Colony's trade for 1949 showed a great increase over 1948, which had itself been considered a boom year. The total value of imports and exports combined was estimated at £316.8 millions sterling (HK$5,068 million), an increase over the 1948 figures of £228.7 millions sterling (HK$3,659 million), of 38%. Imports of merchandise for
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