when in view of active Chinese intervention in the Korean hostilities the United States Government placed a strictly enforced and virtually complete embargo on all shipments of goods to China. Hong Kong, in conformity with the policy of His Majesty's Government, had at that time already introduced certain restrictions on the export of goods of strategic value to China (petroleum and its products for instance had been prohibited from export to China since July 1950) but notwithstanding these restrictions the United States Government clearly considered that the colonies of Hong Kong and Macao might prove to be weak links in the economic chain they intended to throw around the China coast and accordingly included them in the effective area of the embargo. In the initial application of the American restrictions furthermore practically no distinction was made between Hong Kong and China, and almost all commodities, including harmless and non- strategic consumer goods required for use in the Colony, were refused export to Hong Kong, shipments already en route to the Colony being off-loaded at various intermediate ports.
Hong Kong merchants naturally suffered severe losses, and many industrial undertakings, notably those which had depended on American supplies of tinplate and other metals, chemicals and cotton, were specially badly hit.
Some of the commodities affected were subsequently obtained with Government assistance by the Colony's resourceful merchants from the United Kingdom, continental Europe and Japan, where the authorities concerned were prepared to accept guarantees by the Hong Kong Government that the goods in question were solely for the legitimate requirements of Hong Kong industries; but even so, owing to rearmament and world shortages the void could not by any means be completely filled, and many of the Colony's factories were forced to close down or work shorter hours, thus giving rise to unemployment which ultimately assumed serious proportions. In order to come to some understanding with the U.S. Government, Mr. A. G. Clarke, now Financial Secretary, and then Director of Commerce and Industry, was sent to Washington in February. Largely as a result of his negotiations there a certain measure of relaxation was achieved, consumer goods and small quantities of industrial goods being eventually released by the American authorities. During the course of the year, the Colony was visited by various U.S. Government officials and as a result of these visits a better understanding of the problems involved on both sides was achieved. At the end of the year certain essential commodities such as lubricating oil, chemicals, raw cotton and tinplate were still subject, however, to severe restriction.
On 18th May 1951, a Resolution of the General Assembly of the United Nations called on all member countries to impose an embargo on the shipment of strategic goods to China and in conformity with
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