14
INDUSTRY AND TRADE
with 308 million pounds in 1971. This figure would have been higher but for substantial quantities of cotton yarn imported from Pakistan at prices lower than those at which Hong Kong mills could obtain raw cotton. Although this led to an appeal for protec- tion from the industry, the government did not feel that the circumstances warranted a departure from the existing free trade policy. Responding to changing consumer fashions, there was, however, a substantial upsurge in the production of man-made fibre yarn and cotton/man-made fibre blended yarns: production increased by 33 per cent to 69 million pounds. Woollen and worsted yarn production also increased with production reaching 22 million pounds. Most of the yarn production of all fibres was consumed by local weavers.
The weaving sector, with 25,000 looms, produces fabrics of various fibres and blends. Total production decreased by 14 per cent to 761 million square yards in 1972, of which 81 per cent was of cotton, 16 per cent man-made fibres or blends containing such fibres, and 0.3 per cent wool. Although demand for cotton piecegoods continued to be strong, a significant shift to man-made fibres, and cotton/man-made fibre blended fabrics was experienced, again in line with changing consumer fashions.
In the knitting sector, exports of fabrics registered a sharp increase of 100 per cent to 120 million pounds in 1972. Knitted fabrics of cotton took up 24 per cent of the total. As a result of changing fashions, particularly in North America, man-made fibre knitted fabrics assumed much greater importance than previously and accounted for 76 per cent of total knitted fabrics exports, while woollen fabrics constituted a mere 0.3 per cent. A substantial part of knitted fabrics of all fibres was consumed by local clothing manufacturers.
The finishing sector continued to handle an ever-increasing yardage of fabrics for bleaching, dyeing, printing and finishing by various other processes. New machin- ery operating at low temperatures has been imported on a significant scale to cater particularly for the finishing of man-made fibre fabrics.
The manufacture of clothing continued to be the largest sector of the textile industry, with 2,687 establishments employing 124,496 workers, and producing a wide variety of high quality items. With fashion knitwear becoming extremely popular, Hong Kong managed to secure a growing share of this market overseas. In 1972, the textile industry accounted for $6,113 million in domestic exports, an increase of 12 per cent over 1971.
The export restraint agreement concluded with the United States Government in respect of non-cotton textile products, and the agreement concluded with the British Government covering polyester/cotton items, both had serious effects on the re- equipment plans of the textile industry as a whole. Several companies which had made substantial investments in new machinery, or which had planned to do So, found themselves with insufficient quotas to meet their planned production schedules. This situation led to cancellations or scaling-down of re-equipment plans, particularly in respect of companies operating in the man-made fibre sector which, in line with changing consumer tastes, had until now enjoyed rapid growth. However, with the conclusion of these major restraint agreements, companies can now afford to plan