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10. External trade figures show that exports continue to increase in a
substantial way. In June and July, they were 16% higher than in the
corresponding months last year. Any effect on order books will not be
reflected until about October. Imports have fallen very slightly in the
last two months but this is attributable to the reduced trade with China
and the closure of the Suez Canal.
11.
Trade with China has dropped off appreciably partly as a result of
China's internal troubles which has affected trade in food but particularly
because Chinese exports are often deliberatley held up or re-routed to
maintain the fiction that Communist action is crippling the working of the
port. The Communists have made a particularly strong effort in the sphere
of shipping. Considerable pressures have been applied to the Chinese crews
of British ships which call at Chinese ports and some vessels have had to
Gail with men short.
12.
Total bank deposits at the end of June were 15% below the total
at the end of December. But a lot of this reflected a typical Chinese
preference to hold their money in time of crisis and comparatively little
is believed to have left the Colony. July and provisional August figures
show a pronounced decrease in the rate of withdrawal and even some signs
that funds are returning to the Banks. There has been some reduction in
the inflow of capital from abroad especially from South East Asia.
13.
The vast majority of the people of Hong Kong support the firm action
taken by the Hong Kong Government. Their fortitude in face of all the
difficulties is remarkable.
14. Her Majesty's Government's policy was stated by the Foreign Secretary
in Parliament in July:
"We intend to fulfil our responsibilities towards Hong Kong
and take all the measures needed to restore the situation so
that the people who live there may settle down again to their
normal pursuits, which is what the vast majority of them want",
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