TNAG-0005-FCO40-41-Departmental-briefs-about-Hong-Kong-1968 — Page 19

SECRET

32.

Resistance to Hong Kong's developing exports of other products is also growing and much of this arises from

exaggerated fear of the threat posed by Hong Kong. There is a limit to what a community of less than four million

people can produce. Wages have risen rapidly in recent years and already Hong Kong textile exporters are meeting stiff competition from countries such as Korea and the Philippines where wages are lower. The British market, which takes approximately 17% of Hong Kong's total domestic exports, is important to the Colony, not only because of its

size but also because of the benefits of Commonwealth

preference. These provide Hong Kong industry with the opportunity to try out new products in a domestic market which

is lacking in Hong Kong.

33. The maintenance of present standards of living, let alone 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. Since the Hong Kong economy rests on the opportunity to trade it will always be very vulnerable in the event of any general down-turn in world trade or the adoption of more protectionist policies by countries constituting its major markets. 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.

Employment and Unemployment

LABOUR CONDITIONS AND RELATIONS

34. Of the 11⁄2 million people at work in Hong Kong, 576,000 are in the manufacturing industries. In 1967 the registered and recorded number of persons employed in factories and industrial undertakings amounted to 444,000. Unemployment, which in 1961 was estimated at about 11% of the economically

active labour force is among the lowest in Asia. Hong Kong wage rates are high by Asian standards and in general, wages and conditions of work in Hong Kong are second only to those in Japan amongst Asian countries.

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