(4) increased Chinese tariffs which were enforced on January 1st, and which were later strengthened by an additional impost of 10% on practically all imports for flood relief purposes;.
(5) the abandonment of the gold standard by Great Britain in September, causing a sudden rise in sterling exchange which dealers found difficult to assimilate;
(6) further depreciation of Australian currency;
(7) the Sino-Japanese dispute which resulted in a serious boycott of Japanese goods in October, and which persisted with increasing intensity until the end of the year, when there were no indications at all of any early resumption of trade with Japan.
4. Serving as it does as an entrepot for the distribution of Far Eastern, and in particular Chinese trade, it will be readily understood that the Colony is peculiarly sensitive to any reactions in China, with which country it is closely allied both geographically and commercially, and it follows, therefore, that a return to anything approaching normal conditions is almost entirely dependent on a greatly improved state of affairs in China.
5. As stated above, the sterling value of Hong Kong currency appreciated rapidly in sympathy with the decline in the value of the pound sterling, but this rapid appreciation caused considerable confusion in the market, and the full benefit to exporters in Great Britain was not reflected in Hong Kong trade figures.
6. Taken in conjunction with the Chinese boycott of Japanese goods, however, there was a distinct revival in the import trade from Great Britain in the piece-goods group. The last quarter of the year imports of piece goods from Great Britain accounted for 30.4% of the total as compared with 18.9% in the corresponding quarter of 1930, while the Japanese share of this trade amounted to only 7.6% as compared with 31.6%.
7. The seriousness of the effect of the boycott can be seen from the fact that during the last quarter of 1931, the total imports from Japan were valued at only $8,018,000 (£515,000), as compared with $22,450,000 (£1,388,000) in the last quarter of 1930, the chief recessions being in the piece-goods group which fell from $10.2 millions to $2.6 millions, and the foodstuffs group (chiefly marine products) which declined from $4.4 millions to $0.9 million.