CO129-590-22 Situation in enemy occupied Hong Kong 19-1-1943 - 20-11-1943 — Page 64

SECRET.

Orig. regd on 18885/6/43

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Extract from Far Eastern Weekly Intelligence Summary No. 48 for week ending 26.11.43. (FE. 80/3/5/Z. )

HONGKONG.

Information from other sources:-

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1. (a) An article in a German paper outlines the position in Hongkong a

few months ago. According to a census in the spring of 1941, the total population amounted to 1.5 million people, compared with only 850,000 in 1931. 99% of these were Chinese. The first task of the Japanese military administration was to find facilities for the existence of this gigantic city; for Hongkong, thrown on her own resources owing to the absence of a suitable hinterland was incapable of sustaining herself.

In the first place they managed to reduce the number of inhabitants by distributing to agricultural districts those Chinese who had only immigrated in recent years. At the census of 14th July 1942, a population of only 975, 699 was recorded and their number has still further diminished since then.

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Next, a start was made to solve the currency cuestion. At first, the circulation of the Hongkong dollar and the military yen was permitted, but the collapse of the economic system upon which Hongkong was based caused the dollar to fall to an extraordinary degree. original proportion of 1 yen to 2 dollars could not be maintained, and a rate of 1.4 (1 to 4) had to be established. Later the circulation of the Hongkong dollar was prohibited as from 1st June, 1943. Hongkong is, therefore, the first territory occupied by the Japanese in which the enemy currency has been completely abolished, and where only Japanese currency is valid. This is probably the precursor of similar measures in all the territories of South-east Asia occupied by the Japanese, in which at present British and American currencies are still circulating at parity with the Japanese military notes. Since Hongkong's important position as a commercial centre mainly depends upon its transit and agency trade, the Japanese authorities are trying as far as possible to revive this. As an emergency solution, in order to ensure food supplies for Hongkong and afford a freer trade, an order was issued some time ago regulating trade transactions between Hongkong, Japan Proper and North, Central and South China. Trace between these territories may only be carried on by members of the Hongkong Commercial Federation; trade with the South Chinese Coast is, however, open to all business enterprises.

To regulate payments, the Japanese authorities are also taking steps to facilitate a resumption of general trade between Hongkong and other East Asiatic territories. Up to the present the permission of the central authorities has been recuired for all remittances from Hongkong to other territories, with the exception of trade between Hongkong and Amoy and drafts in money under 5,000 yen, which have nothing to do with foreign trade. For remittances such as these, only the permission of the local authorities on the spot for which the order is made out is necessary.

Trade with Singapore and the Philippines will be similarly regulated, while commercial transactions with Thailand, French Indo-Cina, North, Central and South China are settled in Tokyo and imports and exports without bills of exchange are not permitted.

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