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new and more efficient methods of producing cloth. "Trading up"
(i.e. moving into the production of higher quality goods) and new
industries are taking over, however, and the expansion continues.
But the 1965 banking crisis and the effects of the U.K. import surcharge
reduced confidence and slowed down growth last year.
11.
Another corollary of Hong Kong's export success is the rapid
increase in her imports induced by rising incomes. This provides a
growing market for more sophisticated goods from Western countries,
including Britain, a pattern of trade that is mutually beneficial
both to Hong Kong and her trading partners.
Trade with Britain
12.
About 17% of Hong Kong's exports went to Britain in 1965 and
she got about 11% of her imports (13% of her non-food imports) from us
She benefits from Commonwealth preference in our market and this has
helped maintain her position. Nevertheless, after the import surcharge
was imposed in October, 1964 Hong Kong's exports to Britain fell by
£7 million (or 11) in 1965. The surcharge particularly hit her exports
of cotton and woollen garments and such items as rubber footwear.
exports to Hong Kong have also not been doing as well as they might
recently, due to our lack of competitiveness in some items. In 1964
when Hong Kong's imports increased by 14% Britain's exports to the
Colony actually fell slightly.
Trade Promotion
Britain's
13. As a result of the spreading restrictions on her textile exports
there is a growing realisation in Hong Kong of the dangers of independence
upon exports of textiles and of concentration on a few large markets.
Hong Kong industry is resilient and resourceful:
the need for
diversification both of goods produced and of markets in which they are
sold is receiving close attention in industrial circles. Official
Trade Missions have visited East and West Africa, the Middle East and the
Common Harket countries. There has been participation in a number of
international fairs.
Permanent trade representation has been established
in Brussels to cover E.E.C. countries, and in New York. Very recently
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