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because they believed life in Hong Kong would be preferable to that in China. By and large they have not been disappointed, and few if any have returned. This was confirmed during the disturbances in 1967 when an overwhelming majority of the population, by its actions and through organisations, indicated a clear preference for the status quo.
3. This assessment of their lot is understandable. In the last 10 years real wages have risen by about 60 per cent-to be the second highest in Asia- with a corresponding rise in the general standard of living. The proportion of hospital beds to population is the highest in Asia after Japan. The ownership of motor cars in Hong Kong stands at 29 per 1,000 of the population and of telephones at 158 per 1,000. Working hours have been reduced and leisure time. greatly increased; as has the money available to the average citizen of Hong Kong after payment of rent and food. Statistics apart the population know they are doing alright and have every prospect of doing better. Above all they know they are free to better themselves and their families to the best of their ability with a minimum of State interference in their lives. This all adds up to a way of life sufficiently attractive to outweigh the sense of exile from China.
China
4. The most obvious benefit the Chinese Government derives from Hong Kong is financial and economic. And though this factor may not be conclusive, it is one to which the present leaders of China obviously give great weight in deciding to accept the status quo.
5. Hong Kong is China's largest export market; these exports, which in 1972 amounted to £309-1 million (at the current rate), are largely unrequited. According to the best available estimate China obtains about one-third of her foreign exchange from Hong Kong. The total receipts in 1972 are estimated at £534.6 million. Of this nearly 60 per cent was obtained from Hong Kong's imports from China (mainly foodstuffs and raw materials but also an increasing range of unsophisticated consumer goods most of which the Chinese could not dispose of elsewhere); about 10 per cent from overseas remittances; and nearly one-third from other sources including remittances by Hong Kong residents and trading profits earned in Hong Kong by Chinese-owned firms, shops, etc. China has a growing need for foreign exchange to finance her industrial and technological imports. And her inability to diversify the resources now directed to her exports of primary products which find a ready market in Hong Kong, will ensure that the importance of this source of foreign exchange from Hong Kong will continue for the foreseeable future. The recent sharp price increases in Communist shops in Hong Kong demonstrate current Chinese intentions to maximise earnings in Hong Kong rather than reduce dependence on them. While the Chinese dollar is maintained as a purely domestic currency the Hong Kong dollar earnings will have a special importance.
6. Politically Hong Kong provides the Chinese, as did Shanghai before 1949, with a useful window on to the capitalist world. As a focal point in regional, and international, air and sea communications Hong Kong is also a convenient place from which the Chinese can maintain contact with, and exert influence on, overseas Chinese communities in South-East Asia.
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