TNAG-0568-FCO40-701-Planning-paper-on-Hong-Kong-1976 — Page 46

33.

18.

SECRET

Communist dominated unions

(73% of unionised work force) continue their strong recruiting drive but decline to participate in Government sponsored bodies such as the Labour Advisory Board. These unions, at present moderate, take their instructions from China and their interests are largely political. China has not resumed her seat at the annual conference of the I.L.O. If and when she does so she will, at least, have to pay lip service to the I.L.O. 's tripartitism. They may in the very long term influence the attitude of left-wing unions in Hong Kong.

34.

This, and other aspects of

the trade union scene, will be reconsidered after the forthcoming study of labour relations in Hong Kong.

Government Policy

35.

Against this background of weak

or merely political union activity, for which, inspite of several attempts, no one from either the UK or Hong Kong or the international trade union movement has so far suggested any effective remedy, the Government conceives its duty to lie in the field of practice rather than theory. It believes its primary concern should be:

a) the standard of life, i.e. real wages b) conditions of employment.

36.

It is a fact that by means of the somewhat idiosyncratic bargaining techniques used by workers in Hong Kong their real wages rose as fast, if not faster, than those of other comparable countries. In the 10 years preceding the commodity price explosion in '73/74 and the recession of '74/75, real wages rose by 59% with dramatic effects on standards of consumption. The rise in commodity prices with the accompanying increase in the cost of living cut into the real value of wages and the recession prevented compensating upward movement of wage rates, with a consequent drop in real wages. At the trough the gain of 59% had been cut to 35%, but it is now fast picking up again. By September '75 it had reached 40% and by now it is at least 45%, and I expect the lost ground to be recovered this year and the former upward movement resumed next year.