E 5
28. As explained in the report for last year, goods manufactured for export to the Colonial dependencies now require a certificate of Empire content to qualify for admission to Empire preference. These certificates, known locally as "new" certificates, were introduced in May, 1938, and 6,036 were issued during the remainder of that year. In 1939 this total has risen to 14,670, evidence that the system is working smoothly and is proving of benefit in those very markets which probably hold the best prospects for the industry of the Colony.
29. When these 'new' certificates were introduced it was expected that there would be a decrease in the number of 'old' certificates, the use of which was now confined to exports to the United Kingdom and the Dominions. This, however, has not been the case and, owing mainly to an increase in exports to South Africa, the number of 'old' certificates issued was 10,337, or 120 more than in 1938.
30. Form N certificates issued in respect of "spun, woven and finished" goods also show an increase of 480 over 1938 figures, in fact the only decrease is in "late certificates" which have fallen from 149 to 35. This would appear to indicate that manufacturers are becoming better acquainted with the system generally and are taking greater pains to avoid errors. There were 402 factories on the register at the beginning of 1939 and 60 were added during the course of the year as compared with 68 during 1938. On the other hand only 2 factories were removed from the register as against 12 in the previous year so that the final record is 460 registered factories. Among the new entries are 24 knitting factories, 9 weaving factories and 11 factories for the manufacture of clothing.
31. Inspection of factories has been carried out as usual, though the increase in numbers, combined with the increase of work in connexion with the issue of certificates, has thrown a heavy strain on the staff involved.
IX. TRADE STATISTICS
32. Despite continued hostilities in China, and in particular the Japanese blockade of South and Middle China ports, and notwithstanding the inevitable repercussions of the European War, the trade of the Colony was well maintained during the year 1939. In the aggregate the total trade in merchandise decreased by only 0.2% as compared with 1938. Imports declined by 3.9% on average, whilst exports increased by 4.2%.
33. Trade with the South China area dropped very considerably during the year, but this was largely offset by increased trade with North China and French Indo-China. Trade with Germany automatically ceased after the declaration of war in September. Before this the Colony had imported German merchandise valued at $13.1 millions in 1939 as compared with $39.0 millions in the full year 1938, and had exported to Germany $12.6 millions as compared with $13.1 millions in the full year 1938. There were increased exports to the U.S.S.R., consisting mainly of China tea, the export market for which is now located in the Colony. Both imports from and exports to Japan showed a marked increase. Imports from the United Kingdom declined, whilst exports thereto increased slightly.
34. Total imports of merchandise were valued at $594.2 millions in 1939 as compared with $618.1 millions in 1938, and exports $533.4 millions as compared with $511.9 millions.
35. There were increased percentages of the total import trade recorded by Japan, French Indo-China, British Malaya, and miscellaneous countries at present grouped under the heading of "Other Countries"; and increased export percentages by British Malaya, French Indo-China, Japan, United Kingdom, Macao, U.S.A., Kwong Chow Wan, Philippine Islands, India and "Other Countries" (chiefly U.S.S.R.).