TNAG-0050-FCO40-86-Disturbances-essential-food-supplies-1968 — Page 92

0003160 G.F. 316

31.

(a)

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7.

The transport of food supplies is maintained:

by a large fleet of junks and river boats (average 12,800 tons a week);

(b)

by railway from Canton and further north (average 3,800 tons a week);

(c)

by road to and then by trolley or herded over the border bridge at Man Kam To (average 900 tons a week).

(d)

er

to a less/extent by ocean going vessels (average 2, 500 tons a week)

The economics of (a), (b) and (c) at least will be geared to the continuation of supplies to Hong Kong.

32.

In the event of supplies being cut off suddenly the morale effect upon the Chinese population would depend on its estimate of the length of time such restriction would continue. There could be a scramble for existing supplies and Government has not the manpower necessary to impose any control over retail shops generally. Rationing would take time to organise and would also entail a great strain on Government manpower. Any cessation in supplies would represent a problem for the Chinese who would have to redistribute the large quantities of food which have been grown and collected for the Hong Kong market. However the quantities are small by Chinese standards. The main loss to the Chinese would therefore be in foreign exchange.

33.

A gradual dwindling of supplies would give time for alternative sources to be exploited and the necessary shipping arrangements made. However prices would inevitably be somewhat higher and this would lead to a rise in the cost of living which could be expected in turn to give rise to demands for higher wages.

This could have a most serious effect on the competitive position of Hong Kong manufactures at a time when owing to a reduction in overseas confidence in the future stability of Hong Kong, orders may be difficult to obtain,

34.

Subsidising food to maintain the existing price structure might be a useful short term measure but it obviously could not be expected to withstand a long term withdrawal of Chinese supplies.

35.

There is no way in which Hong Kong can disrupt supplies of any important commodity to China if its Government once decides that the foreign exchange gained through Hong Kong is of less importance than a political advantage.

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