TNAG-0014-FCO40-50-Kowloon-disturbances-1967 — Page 148

CONFIDENTIAL

3

-

Food and Water Supplies

12. The border disturbances and the unsettled state of Kwangtung

Province have caused food supplies from China to be erratic.

There is

no indication of any deliberate attempt to hold up supplies; indeed,

when the road route at Man Kam To was closed, there was a compensating

increase in the volume of supplies coming in by sea. The main shortage

has arisen in the supply of pigs. As a result the price of pork has

increased but generally prices are firm. As a precaution, however, the

Hong Kong Government are examining the possibility of securing alternative

food supplies and have sent missions to Japan and South Korea to this end. Enquiries are being made in London about alternative meat supplies and also

about securing advice on rationing schemes.

13.

Rains at the end of August considerably eased the water supply

situation to the extent that the reservoirs now hold enough to maintain

a restricted supply until the end of the next dry season even if China

should fail to honour her obligation to resume her supplies on 1st October (there is nothing to indicate that she proposes to default). In addition,

the new Plover Cove reservoir is one-third full and salinity there is

gradually falling towards acceptable levels. Nonetheless, alternative

sources of supply are being sought and contingency plans prepared for

the transport of water to Hong Kong by tankers.

Trade and Industry

14. Hong Kong's economy must inevitably suffer some damage as a result

of Communist confrontation. The extent cannot be clearly seen at the

present time.

15. 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.

reflected until about October.

Any effect on order books will not be

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.

CONFIDENTIAL

/16. Trade