ravition. !
big way. . !
1.
curtainly do have a descit trade, including our own, but whereas our pap has not exceeded 10 per cent, in any recent year, Hong Kong's is 34 per cent. media corninly has a comparable gup. but this is in a country which has an enormously larger domestic economy, and in India it is covered by carefully regotiated loans between Governments. Hong Kong receives 117) Governinent loans.
Some of the gap in the balance of Hong Kong's trade is filled by invisible earnings, notably from tourism, but endoubtedly the large remaining gap indicates a very substantial inflow of capital. The source of this capital, I unders and, is mainly overseas Chinese all o South-East Asia who are invest- ing their money in Hong Kong, and who find it profitable to do so. No onc seems able to say just how large is this. capital inflow. One reason for this lack of statistics-which is being remedied now is the happy position of the Hong Kong Government in having practically no national debt.
As the Government have not had to borrow money they are not bothered about having to pay it back, or paying interest on debt. So the Hong Kong Goverment say that the balance of payments is self-regulating, surely an ideal cconomy in the cyes of the hon. Members opposite. The Government just do not have to know what is going on in the way that we have to know in this country. This is fine so long as the capital inflow continues. Even if the ital inflow falls off the Govern- ment can still avoid embarrassment to themselves or to the currency by reduc- ing their spending on capital goods, on can i programmes. i would be the private citizen, the ordinary worker, who would suffer.
Much of the money coming into Hong Kong is now being invested in property. The supply of land is very limited and
by the the
ea
Jon's del pric
1962-63 doubled
of the pronous year to mar til nd it is sufficient to finance
Se
10
, and t its propery, it cestor from abroad is fun icing the Cavern- ment as well as the private building in the economy.
There is, of course, a spiral in this investment bouti It is My profit- able to invest in property which is to house the people who are to build the next property in which one is to invest, and so on. The Hong Kong Govern- ment are very well aware of the dangers of such a boom running away to the point where it "busts", with a full off in new investment destroying the profit- ability of former investments. In bis Budget speech on 27th February, the Financial Secretary in Hong Kong said that one of his
'nightmares is that by rapid and wasteful expansion WC come to the end of our resources with an incomplete and unbalanced structure ".
In other words, it is necessary to build up Hong Kong's industry and trade so that it can earn a sound living. Certainly, no one development will secure this, but it does seem to me that a new element is needed in the situation other than de old battle of tariffs and quotas.
It would be helpful, at this point. consider the political position of Kong. It exists because it is vert China, not only as a necting ploc the outside world but as a very stantial source of foreign exchange. Kong imports, mainly of food, from in 1962 were £75 million. Jis c to China were £5 million, leaving C with foreign exchange earnings of £70 million.
From China's point of view this meeting place with the outside world is as con- venient in British hands as any.
As an
ependent territory everyone recognises that it would become a cockpit for the struggle between Chinese Nationalists and Communists which could only lead to its absorption into China, with the loss of its valuc as a mecting place. Also,
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