10
HONG KONG AS A PARTNER IN WORLD TRADE
Connected with this has been Hong Kong's favourable location in a strategic position within the Pacific basin, athwart the major shipping and air routes, which provide it with convenient connections to all the major world markets. The territory's modern network of telecommunications links with all parts of the world by wireless, cable and satellite has also played a crucial part in recent years in facilitating and speeding business transactions. Of particular importance throughout its history has been Hong Kong's position on the edge of China, which makes it the natural gateway for trade with the world's most populous country. This has been assuming even more significance in recent years, as we shall see.
Next, and not least, are the characteristics of the people of Hong Kong. Swollen by successive waves of immigration as well as by natural increase, the population has increased by about a million every decade since the late 1940s, from just over two million in 1950 to three million at the beginning of the sixties, four million in the early seventies and five million at the start of the eighties. It now totals about 5.5 million. It is a people bustling and active, restlessly in search of opportunities to better themselves, hard working and perceptive. There is a wealth of entrepreneurial and business talent continually bubbling to the surface and, with a gambler's instinct, many are willing to try their hand at starting their own enterprises, often in a very small way. Many have failed on the way, but many have succeeded and have enriched themselves in the process of making their contribution to economic expansion. Of importance, also, has been the cross fertilisation between local business and expatriate enterprises, bringing with them outside investment and know how. Finally, and of particular significance in the workings of the economy, has been the functioning of the labour market. This has operated much closer to free market principles than is the case with most other economies, especially among the advanced countries. Wages have, for the most part, been determined by the supply and demand for labour and have not been greatly influenced by collective bargaining, certainly not by central, industry-wide, collective bargaining between employers associations and powerful trade unions. It has been alleged in the past that this has led to the exploitation of labour; but this is not a charge that can easily be sustained in an expanding economy such as exists in Hong Kong. The fact that real wages have increased by some 40 per cent in each of the decades of the sixties and seventies is evidence that the fruits of economic growth do filter down to the labour force and that the system works. Certainly all this means that the Hong Kong labour market operates very flexibly to induce labour to move from declining to expanding areas of activity and thus to be used most productively. Because of this flexibility, also, it ensures that full employment is the norm and that the continuous adjustments that are taking place in wages and conditions help to maintain full employment.
Of course, this is not all. There has been a very considerable body of government legislation laying down minimum working conditions and covering health hazards in certain industries, the employment of women and young people, severance pay and so on. Hong Kong has adhered to more International Labour Organisation (ILO) conventions than any other territory in comparable economic circumstances and more than some advanced countries. Very considerable efforts are also being made in education and training to upgrade the skills of the working population. However, the flexibility of Hong Kong's labour market has played a big part in facilitating the continuous adjustment of the economy as a whole to the demands and opportunities of world markets.
Trading Partners
Although Hong Kong conducts trade with all continents and with most countries in the world, the first point to note is that the greater proportion of its trade is carried on with