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on finding and retaining markets for the wide variety of

manufactured goods which it produces. It now ranks 18th amongst

non-Communist exporting countries. 1972 exports (including

re-exports) were worth £1,393 million.

The main exports are

clothing and textiles, and also light manufactured articles such

as footwear, radios and handbags. Imports in 1972 totalled

£1,563 million. The Colony depends heavily on invisible trade,

especially tourism, to redress the imbalance. The economy is

based entirely on private enterprise and free trade. There are

virtually no protective tariffs or quantitative import

restraints. There are no legal restraints on capital or

monetary movements. There is a free market in foreign currency.

Direct taxes are low; the standard rate for income tax and

profits tax is 15%. The budget is regularly balanced. The

gross domestic product for 1972 is provisionally put at

£1.6 billion, giving a GDP of £403.5 per head.

In recent years GDP has been growing at an average rate of 7% in real terms.

LABOUR AFFAIRS

7. From a base of 100 in March 1964 the nominal wage index in

Hong Kong had risen by March 1973 to 239 in nominal terms and

159 in real terms. Hong Kong wages are the highest in the

Far East outside Japan. There is full employment. Many workers

receive additional benefits such as free medical attention,

subsidised meals, good attendance bonuses and subsidised

transport to and from work. The total paid up membership of the

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/Trade Union