(b) Commodities Exported
25. Clothing accounted for 39% by value of Hong Kong's total domestic exports in the first nine months of 1973 compared with 40% in both 1972 and 1971. Although, in quantity terms, domestic exports of clothing in the first nine months of 1973 remained unchanged, their value still increased. Domestic exports of foot- wear continued to decline, in quantity terms, in 1973; and, as in 1972, they declined in value terms as well in spite of further price increases.
26. On the other hand, domestic exports of textile fabrics, which accounted for 8%, by value, of Hong Kong's total domestic exports in the first nine months of 1973 compared with 7% in both 1972 and 1971, continued to grow at much the same rate, in quantity terms, in 1973 (6%) as in 1972 (5%) even though prices in- creased by as much as 25% compared with 8% in 1972. Other commodities in respect of which domestic exports increased quite rapidly, in both value and quantity terms, in the first nine months of 1973, included textile yarn and thread, tran- sistorised radios, electronic components, metal manufactures and watches and clocks.
(c) Principal Export Markets
(i) United States
27. Although the United States is still Hong Kong's largest export market, the proportion of total domestic exports sold there declined to 37% in the first nine months of 1973, compared with 42% and 40% respectively in the years 1971 and 1972. As can be seen from Table 9(a) the decline in the first nine months of 1973 occurred despite a 12% increase in export prices because, as can be seen from Table 9(b), domestic exports to the United States, in quantity terms, actually declined in this period. In fact, the rate of growth of Hong Kong's domestic exports to the United States has declined steadily in recent years.
28. In 1971, 39% of Hong Kong's domestic exports of clothing, in value terms, went to the United States market, but this had fallen to 35% in 1972 and to 32% in the first nine months of 1973; and, as Table 9(b) suggests, it was the decline in domestic exports of clothing to the United States, in quantity terms, that largely accounted for the reduction in the overall rate of growth of domestic exports in this market from 1971 onwards.
29. To an extent, the decline in the rate of growth of domestic exports to the United States in 1971 reflects the slowing down in the rate of growth of import demand at that time, a slow down due largely to the imposition of a
10% import surcharge in August of that year. The further decline in the rate of growth of domestic exports in 1972 and 1973 can, in large measure, be attributed to the impact of the effective devaluation of the United States dollar in December 1971 and its further devaluation in February 1973, and to the effects of the bilateral agreement concluded in October 1971 with the United States Government, under which Hong Kong's exports of man-made fibre and wool textiles and clothing to the United States were subjected to quantitative restraint, while the existing agreement for the regulation of exports of cotton textiles and clothing remained in force.
(ii) United Kingdom
30. In the first nine months of 1973, 14% of domestic exports by value were destined for the United Kingdom which was Hong Kong's second largest market; and this compares with 14% in both 1972 and 1971. Domestic exports to the United Kingdom increased by 20%, in value terms, in the first nine months of 1973 but, as can be seen from Tables 9(a) and 9(b), export prices in this market increased by 13%, compared with 8% in 1972 and 7% in 1971 and hence, in quantity terms, exports increased by a more modest 6%. In quantity terms, this growth rate was, however, higher than for any of the years 1969 to 1972 with the exception of 1971.
31. Exports of clothing accounted for 51% by value of total domestic exports to the United Kingdom in the first nine months of 1973 compared with 50% in 1972 and 49% in 1971. But Table 9(b) shows that domestic exports of clothing to the United Kingdom increased by only 3% in the first nine months of 1973 compared with 4% in 1972. Textile fabrics in the first nine months of 1973 accounted for 10% by value of domestic exports to the United Kingdom compared with 12% in 1972 and 14% in 1971, while these exports accounted for 18% by value of total domestic exports of fabrics in the first nine months of 1973 compared with 24% in 1972 and 26% in 1971. Table 9(b) shows that in the first nine months of 1973 domestic exports of textile fabrics to the United Kingdom decreased, in quantity terms, by 22% compared with a slight increase in 1972. Ex- ports of both clothing and fabrics in 1973 were affected not only by market conditions and currency changes, but also by Hong Kong's agreement to restrict its exports of polyester/ cotton goods. These restrictions came into effect from October 1972. All woven cotton textiles were, of course, already under restraint.
32. Domestic exports of footwear accounted for only 1% of total domestic exports, in value
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