A 42
to the established principle that Hong Kong should as far as possible keep in step with China in regard to its currency policy, as any wide divergence of the Hong Kong Dollar from the Chinese Dollar brings in its train considerable dislocation of trading facilities.
From the table in paragraph 21 it will be seen that the premium on the Hong Kong dollar compared with Shanghai gradually fell from nearly 7% in March to a little over 2%. This compares most favourably with the year 1935 when the premium fluctuated from 18% in February to over 40% in May and remained over 30% until the new monetary policy was announced in November.
29. It is still too early to predict what effect Hong Kong's new monetary policy will have on the trade and prosperity of the Colony. It is felt that stability of exchange should result in improved trading conditions and in the last few months of the year signs of improvement were not lacking. But, as was written in this report last year, "it is not to be expected that it will restore to merchants markets lost by tariff barriers, cheap foreign labour and subsidized competition." The stability of exchange in China, also considerable advances made towards national unification and increasingly friendly relations between the Colony and its immediate neighbour Canton, have all been factors having a stimulating effect on trade and tending to a more optimistic outlook for the future.
30. The Trade Returns for the past five years are here tabulated for comparison:
IMPORTS EXPORTS (excluding Treasure) 1932 $624,047,600 $471,859,706 1933 $500,938,794 $408,092,170 1934 $415,918,522 $325,104,653 1935 $364,989,519 $271,033,363 1936 $452,350,193 $350,864,787Exchange affected these returns considerably in previous years and the best comparisons are with 1932 and 1933 when exchange was fairly steady between 1/3 and 1/5. It will be seen, therefore, that we still have some way to go even to reach the comparative prosperity of these days.
- A 42
to the established principle that Hong Kong should as far as possible keep in step with China in regard to its currency policy, as any wide divergence of the Hong Kong Dollar from the Chinese Dollar brings in its train considerable dislocation of trading facilities.
From the table in paragraph 21 it will be seen that the premium on the Hong Kong dollar compared with Shanghai gradually fell from nearly 7% in March to a little over 2%. This compares most favourably with the year 1935 when the premium fluctuated from 18% in February to over 401% in May and remained over 30% until the new monetary policy was an-. nounced in November.
29. It is still too early to predict what effect Hong Kong's new monetary policy will have on the trade and prosperity of the Colony. It is felt that stability of exchange should result in improved trading conditions and in the last few months of the year signs of improvement were not lacking. But, as was written in this report last year, "it is not to be expected that it will restore to merchants markets lost by tariff barriers, cheap foreign labour and subsidized competition." The stability of exchange in China, also considerable advances made towards national unification and increasingly friendly relations between the Colony and its immediate neighbour Canton, have all been factors having a stimulating effect on trade and tending to a more optimistic outlook for the future.
30. The Trade Returns for the past five years are here tabulated for comparison:
:
IMPORTS
EXPORTS
(excluding Treasure) (excluding Treasure)
1932
$624,047,600
$471,859,706
1933
500,938,794
408,092,170
1934
415,918,522
325,104,653
1935
364,989,519
271,033,363
1936
452,350,193
350,864,787
Exchange affected these returns considerably in previous years and the best comparisons are with 1932 and 1933 when exchange was fairly steady between 1/3 and 1/5. It will be seen, therefore, that we still have some way to go even to reach the comparative prosperity of these days.
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