SECRET
representatives in the Counsellor rank have been attached to the
Embassy Washington and U.K. Mission Geneva to cover trade relations
at the inter-governmental level.
14. The growing complexity and diversity of the Colony's exports has
led this year to the establishment of an Export Credit Insurance
Corporation on British lines. The General Manager of this body was
recruited from the United Kingtom Export Credits Guarantee Department.
In addition a semi-official Export Promotion Council has been set up
somewhat on the lines of the British National Export Council.
Future Prospects
15. Despite the restrictions on her exports, the shortage of suitable
land for industrial development and an apparent insufficiency of skilled
labour, industry in Hong Kong has continued to grow and her exports to
maintain a steady 12%-15% increase by value per annum. Nevertheless,
with the full weight of the population "bulge" still to be felt (in
the 1961 census 40% of the population were under 15), the maintenance
of present standards of living (much more so any improvement in those
standards) depends on the ability to expand industrial production and
exports. These in turn depend partly on the extent to which industry
can improve quality and productivity and diversify both its products
and its markets. There are signs that industry recognises and is
prepared to grapple with these problems. Basically, however,
Hong Kong's economy rests on the opportunity to trade; it is, and will
always be, very vulnerable in the event of any general downturn
in world trade or the adoption of more protectionist policies by
countries constituting its major markets.
16. For these reasons Hong Kong depends heavily on the maintenance
of the most favoured nation principle in trade and other G.A.T.T.
rules and she values highly her rights under the G.A.T.T. and the
Long Term Arrangement on Cotton Textiles. Her fear is that these
rules will either be increasingly flouted or they will be changed to
her detriment. If this were to happen she could be placed in a special
category of countries (perhaps with Japan), exposed to unfavourable
discrimination.
SECRET
/Common Market
No comments yet.
Private notes are available after approval.