INDUSTRY AND TRADE
77
commerce. They explaining to him their reluctance to extend restrictions beyond the initial period of three years.
The approaches which the United States Department of Com- merce had made in 1959 to promote a similar undertaking from Hong Kong's garment manufacturers were carried a stage further. Early in January representatives of the garment industry in the United States rejected the initial offer from a group of local manu- facturers who were willing to stabilize exports of five types of cotton garments for a three years' period at fixed ceilings which allowed for a reasonable annual rate of growth. The American industry suggested lower ceilings and other modifications of the original offer which were not favourably received in Hong Kong. Public opinion and the press grew increasingly vociferous in their opposition to any limitations, and the situation swiftly became one of stalemate. With a fall-off in orders later in the year, the matter
rests.
Canadian textile manufacturers, who were concerned at the extent of the penetration of Hong Kong garments into their domestic market, made tentative approaches on similar lines in the autumn, and suggested quotas similar to those which they had arranged with Japan. The initial reaction of the trade was courteous but nevertheless firmly opposed to any such measures.
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Early in the year the United Kingdom Government (on behalf of Hong Kong) and the Republic of Indonesia signed a memoran- dum of understanding to provide for the spinning in Hong Kong of American raw cotton supplied to Indonesia under the United States Public Law 480 programme. The understanding provided for the export to Indonesia of 24,650 bales of cotton yarn valued at about $24 million. Payment was made on the basis of 35% cash and 65% raw cotton in the form of a purchase authorization issued by the United States Government. This was the second occasion on which the Colony's textile industry had the opportunity to process American raw cotton for Indonesia and it brought some very welcome businesss to the spinning mills.
At the end of the year, the United States Government decided to stop countries receiving American aid from spending it in nineteen countries, of which one is Hong Kong. It is flattering to find the Colony grouped with eighteen other 'financially strong countries' which, apart from Australia, Canada, Japan, New