8. Some progress was made in the work of the Housing Commission and from the study of data collected a draft report was prepared for consideration by the Commission.
# Chapter VI.
## PRODUCTION
Hong Kong is the port for South China, and the greater part of the large volume of goods that pass through it is in transit between South China and other parts of the world, including North and Middle China. The Colony itself produces comparatively little, though the shipbuilding, cement, rope, tin and sugar refining, rubber shoe and cotton knitting industries are not unimportant. Mining has been developed in recent years and agriculture is widely practised throughout the New Territories. Rice and vegetables are grown, and there is considerable poultry farming, but in insufficient quantities to supply the needs of the urban populations of Victoria and Kowloon. The cultivation is in the hands of the Chinese villagers. Sea fishing is an important industry, but here again local supplies have to be augmented by importation from outside.
2. Reports on the principal industries for the year 1937 are given below:-
Refined Sugar. World sugar prices continued to advance in the early part of 1937, and, after a period of uncertainty as to the outcome of the quota arrangements decided upon at the World Sugar Conference in London in April, 1937, quotations again advanced in company, at last, with general commodity prices. There was a very marked increase in quotations, and business generally, in the Far East early in June when the sugar selling organization in Java raised its limits as a result of its newly strengthened position.
A surplus of sugar available over and above the U.S.A. import quota resulted in an attempt to sell Philippine sugar in Hong Kong, but this danger to the market was ended, after only a few deliveries had been completed, by the threat of action under the terms of the International Sugar Agreement.
The Kwangtung sugar mills did not all go into active production in conditioning imported sugars as in the previous year but confined their activities to crushing local cane only. Their total output was thus considerably reduced during 1937.
The start of hostilities in North China in July and the subsequent spread of fighting to most important markets in China resulted in a breakdown in normal trading. Considerable quantities of distressed sugar were landed in Hong Kong and