2
Industry and Trade
BEING heavily dependent on international trade, Hong Kong could not insulate itself from the effects of world-wide inflation and financial disorder prevalent during 1974. Traders and industrialists experienced a difficult time during most of the year in a situation of unstable supply prices for many essential raw materials, soft market con- ditions, increasing competition, tighter financial liquidity and falling profit margins. However, in spite of these problems Hong Kong's global domestic exports fared well, achieving a moderate growth in quantity terms.
A number of factors contributed to this relatively encouraging situation. They included an enlightened investment and re-equipment programme during the better trading conditions of the previous year; greater competitiveness arising from a mini- mum level of internally generated inflation (as opposed to imported inflation in the form of higher prices for raw materials and equipment); greater concentration on selling techniques in the traditional major markets of North America and Western Europe, and the exploitation of new markets in Asia and Eastern Europe.
The major factors which have given Hong Kong its international reputation as a leading manufacturing and commercial centre in Asia are still at work. Among them are the economic policy of free enterprise and free trade, an industrious work force, a sophisticated commercial infrastructure, a modern and efficient seaport, a strate- gically located airport, and excellent world-wide communications.
Hong Kong is one of few territories still faithful to liberal economic policies of free enterprise and free trade. There are no import tariffs, and revenue duties are levied only in respect of tobacco, alcoholic liquors and some hydrocarbon oils. Duty is also payable on first registration of non-Commonwealth motor vehicles.
Apart from the provision of the infrastructure, either through direct services or by co-operation with public utility companies and autonomous bodies, the govern- ment's role in the economy remains one of providing a stable framework within which commerce and industry can function efficiently and effectively with a minimum of interference. The government intervenes only in response to the pressure of over-riding economic or social needs and provides no protection or subsidisation of manufactures.
The Oil Supplies Unit, the Oil Policy Committee and the Oil Distribution Com- mittee which were established in November 1973 following the Arab oil-producing countries' decision to cut their output, continued their functions until the middle of the year, when the various measures introduced under the Emergency Regulations came to an end. In devising and implementing controls over fuel consumption strenu- ous efforts had been made by these organisations to ensure that minimum disruption