2.

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Hong Kong's success, against all the odds, has given

rise to a widespread belief in influential circles there that

economic growth on this scale could only have been achieved

by total reliance on market forces, particularly evident in the field of monetary management and wages; and by low taxation policies which have encouraged entrepreneurial energy and preserved the Colony's attraction to investors, both Chinese and foreign. Consequently, though there is no

resistance to proposals for social advance or to improvement

of working conditions, for their own sake, there is anxiety

lest these may make such demands on the economy that taxes

and costs will rise to a point at which the Colony ceases to

be attractive to investors or competitive in the world

markets. These are real fears and they must be given weight in determining future progress.

3.

The past and present internal policies of the colonial

Government must be viewed against this economic and socio- logical background and in the historical context of post-war

Hong Kong. The administration reinstated after the Second

World War faced a society in ruins. It has since had to grapple, in effect, with a permanent emergency situation (caused by

vast and irregular flows of immigrants and a high birth rate).

Doubtless the willingness of the population to endure what

to Western eyes appear harsh conditions is a major contributory

factor in Hong Kong's stability and growth: there has been little or no "reverse-immigration" back to China; virtually

no popular move in the Colony for its reincorporation in

China;

and very little industrial unrest. But the commitment

of successive Governors to the well-being of the inhabitants

and the efficiency and determination of Hong Kong officials is often overlooked by critics failing to appreciate the

scale of the problems to be faced. Despite these, since 1954

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