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Two Decades of Economic Achievement
SOME 20 years of rapid economic change have led to Hong Kong's present day posi- tion as a major centre of industry, trade and finance.
In taking stock of the territory's economy, the mid seventies and the mid fifties also happen to provide natural and similar points of punctuation. It was in 1955-6 that Hong Kong started to readjust to the marked effects of the United Nations embargo on trade with China. Twenty years later, in 1975-6, Hong Kong recovered at a remarkably rapid rate from the worst post-war recession induced by a general reduction in world trade.
During the years between, the aiming for and the achieving of prosperity involved an interdependent set of forces. Of these forces the size, growth and structure of Hong Kong's population was and continues to be-the most important.
The population's rapid growth in the fifties forced on Hong Kong the need to expand exports to finance the import of goods needed by the increasing numbers of people. At the same time, the structure of the expanded population and the embargo on trade with China changed the nature of these exports from re-exports to domestic manufactures.
Much of the early growth in the population was the result of adults coming to Hong Kong from China, providing an instant increase in the labour force. Then the high birth rate associated with this new segment of the population produced a sudden expansion in the number of dependants-who subsequently provided a further rapid growth in the labour force during the late sixties and the early seventies.
It was fortunate that the background to these developments in Hong Kong was a growth from the early fifties in the purchasing power and consumption levels of people in Europe and America. Combined with this steady rise in prosperity, there was a movement towards greater liberalisation in world trade. These two developments generated enough demand for Hong Kong manufactures to enable the rapid increase in the labour force to be absorbed.
But a need to become richer and also growing trade prospects have often been present without producing the contrast in wealth between the fifties and the seventies that occurred in Hong Kong. A number of other factors contributed to stimulate industrial activity.
The arrival of established entrepreneurs from Shanghai-and with them a certain amount of physical capital that had arrived in Hong Kong but had not been re- exported to Shanghai-provided a vital expansion to a nucleus of manufacturers.