CO537-2188 — Page 239

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industrial labour have generally speaking outstripped the rise in cost of commod-

ities owing to a local shortage, especially of skilled labour.

So far as European firms are concerned, re-adjustment is to some extent

possible through the medium of a variable cost of living allowance but Chinese

employers have not made use of this device and have not hesitated to pay fantas-

tically high wages, secure in the knowledge that they could recoup themselves by

charging and getting fancy prices on the local market and in "scarcity" markets

overseas,

These conditions are changing fast and there is no question that if

Hong Kong wishes to retain a place for her products in world markets she must

Our unions will, therefore, bring her production costs into line with realities.

very shortly be faced with problems of adjustment of wages under conditions which will almost certainly entail their making concessions, concessions which will not be popular with their members and which will not increase the confidence

of the workers in their unions. The position is in fact exactly the opposite

to that obtaining in 1940-41 when the unions took the offensive in a good cause;

I need not stress the possibilities of they must now fight a retiring action. the present situation for the extension of influence by a party which can take the easy course of laying the blame for all misfortunes on Imperial exploitation. Independent development will, therefore, be very difficult, in fact at

The only effective opposition to K.M. T.

Such a bias does not infiltration is a positive anti-K. M. T. political bias. necessarily mean Communism but in a union it does mean affiliation with the anti- K. M. T. group of unions, the leaders of which are mainly ex-East River Communists. The unions themselves are genuine workers' organisations organised on an industri-

Their leadership, however, is not too good. al, as opposed to a craft, basis.

the moment I think it is impossible.

It is extremely difficult to find among this class of worker men who possess the

intelligence *

necessary

éducation and organising ability to lead the union, but when found

This

they are usually politically minded and with definite political ties. need not necessarily be a bad thing, provided the political association is such that it does not in itself hamper the growth of a democratic trade union, but there is an unfortunate tendency for these leaders gradually to assume dicta- torial powers in their relations with the unions and of course there is always the temptation to subordinate the interests of the union to the interests

Of all the trade union officials I have met, only three possess a slight

knowledge of English.