CONFIDENTIAL
The Colony is now firmly established as an industrial economy
dependent upon exports rather than a domestic market. Since Hong
Kong has to export to live the only industries worth having are
those whose products can be sold in the domestic market without
protection or which can be exported without subsidies. Hong Kong
has therefore remained true to the traditions established when it
was an entrepot, i.e. no tariffs other than those which are designed
solely to produce revenue and free ingress for other goods from any
quarter of the globe. The entrepot trade is, however, still
considerable.
160
Hong Kong's domestic exports have been expanding steadily in
recent years at the rate of 11-16% per annum (in 1968 and 1969 at the
rate of 25-26%). Textiles still account for a high, though
declining percentage of the total (about 47%), with woollen knitwear
now an expanding sector (especially in the United States). Other
products, such as electronics and synthetic textiles, are also
showing a considerable expansion. Well over a half (63%) of Hong
Kong's exports go to three markets (the United States, the United
Kingdom and Western Germany) and sales to some other countries in
Western Europe, mainly Scandinavia and Switzerland, are also
increasing.
17. Despite the export success story it must be emphasised that the
Colony consistently imports more than she exports (this gap is
bridged by Hong Kong's considerable "invisible" earnings and by
capital inflow). A large part of this is food ( a considerable
amount from mainland China), but Hong Kong is providing a large and
growing market for western manufactured products.
Restrictions on Hong Kong's Exports
18
The success of Hong Kong's exports has led to counter pressure
from industries in importing countries affected by her competition
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CONFIDENTIAL
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