CONFIDENTIAL
It appeared that the Import Deposit Scheme introduced in
November, 1968, at the time of the international monetary crisis,
might adversely affect Hong Kong's trade with the United Kingdom.
However, with the large liquid funds available in Hong Kong (both
within the official reserves and in commercial hands) Hong Kong
exporters seem to have had no difficulty in financing these customs
deposits. Because Hong Kong is within the sterling area, exchange
control cannot be used to prevent overseas financing of this scrt
and it may even be that Hong Kong has benefited over trade
competitors less well placed financially.
25. United Kingdom exports to Hong Kong in 1969 totalled £82m (or
8% of all Hong Kong imports). Our exports, while showing an
increase in value in the last few years, represent a continually
shrinking share of the Hong Kong market, of which Japan (23%), China
(18%) and the U.S.A. (13%) hold the largest shares. The main
British exports are machinery, non-metallic mineral manufactures,
textile yarns and transport equipment.
25.
British trade interests in Hong Kong are looked after by the
British Trade Commission. The Senior Trade Commissioner is
Mr. J.K. Blackwell, a member of the Diplomatic Service.
Future Prospects
27. Despite the restrictions on her exports, the shortage of suit-
able 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 spectacular 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 (more so any improvement
in those standards) depends on the ability to expand industrial produ
production and exports. This in turn depends partly on the extent
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CONFIDENTIAL
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