CO
CONRODENN A
THE BOOM YEARS 1945-1971
Population Growth
4.
Since the war, the Hong Kong economy has been radically transformed, from an entrepot for the China trade to a modern manufacturing metropolis. This means that its export sector now largely handles domestic exports rather than re-exports as in the past. This was partly brought about by the rapid growth of the population, swelled in the early 1950's by a massive influx of refugees. In 1945 the population stood at 600,000; by 1955 it had risen to 2.49 million; and by 1965 it had reached 3.69 million. Today it stands at 4.35 million. But the main impetus to the transformation process came from the United Nations' embargo on much of the trade with China: between 1951 and 1954 the value of Hong Kong's exports actually declined by as much as 45%.
Specialisation
5. Largely as a result of the government's free-trade policy and its determination not to become directly involved in the management of the economy, Hong Kong has since the war tended to specialise in the production, for export, of those commodities in which it has a comparative advantage over its overseas competitors. As much as 80% by value of Hong Kong's output is exported and this is why such a very high proportion of its domestic expenditure is represented by imports, these being in effect commodities in which other countrie: have a comparative production advantage over Hong Kong. Today, Hong Kong's principal suppliers include Japan, China, the United States, the United Kingdom, Taiwan and, since the oil crisis, Singapore,
6. For almost the whole of the period since the war Hong Kong has been especially well-known for the production of textiles (including clothing). This pre-eminence followed the arrival in Hong Kong in the early 1950's of refugee textile manufacturers from Shanghai (end the associated diversion to Hong Kong from Shanghai of shipments of newly-acquired textile machinery). It also stemmed from the fact that the Hong Kong banking community had already been
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CONFIDENTIAL D
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