15
manufactured in foreign countries to factories situated in the empire for the completion of the manufacturing process in order to become eligible for imperial preference. So in 1933 new regulations were issued which required most manufactured goods to show 50 per cent empire content of materials and labour in order to qualify for preference. A circular despatch was sent to all colonies requiring them to do the same and a model ordinance to effect this was enclosed. The 15 torch factories in Hong Kong used foreign brass to make the torch casing since it was cheaper than brass exported from Britain. The British Customs and Excise Department ruled that since brass constituted at least 40 per cent of the value of the finished product, unless British brass was used, torches should be classed as foreign and so be ineligible for admission to Britain free of duty. In 1935 the British Customs imposed a specific duty of 14 pence per pound on flashlight torches. This roughly doubled the cost of Hong Kong torches making it difficult for them to compete in the British market. Protests were made, but the British Customs refused to trust the costings supplied by Hong Kong showing a 50 per cent empire content and suggested that the factories should use empire brass exclusively for certain months of the year; if this was satisfactorily authenticated by an accountant's certificate Customs were prepared to allow Hong Kong torches to enter free of duty. Such arrangements were too complicated and expensive for most of the Chinese workshops involved, so they decided to do without imperial preference. Exports to Britain constituted less than 6 per cent of their total production.
58
These and other moves to limit Hong Kong's manufacturing exports provoked the governor to make a strong plea in unusually forthright terms to the Colonial Office for favourable treatment on the ground of Britain's imperial interests.
We are a tiny place and have no sufficient home market to support industrialization on any large scale. Between us and China there is a customs barrier and I do not see (with the rising tide of Chinese nationalism) any chance of their lowering the barrier for Hong Kong products. So if there is to be future for industrialization in Hong Kong its market must be a cheap and distant one, a protected market within our colonial empire. From an imperial point of view the question boils down to this. Is Hong Kong to be left just as a fortress port with a dwindling entrepot business or is it to be allowed to make up for what it loses on the entrepot swings by its takings on the industrial roundabout? Hong Kong has (except in the case of rubber) no near or cheap source of empire raw material, and so the empire content of its products will generally not greatly exceed the percentage which the cost of manufacture bears to the cost of material. If this is not
15
manufactured in foreign countries to factories situated in the empire for the completion of the manufacturing process in order to become eligible for imperial preference. So in 1933 new regulations were issued which required most manufactured goods to show 50 per cent empire content of materials and labour in order to qualify for preference. A circular despatch was sent to all colonies requiring them to do the same and a model ordinance to effect this was enclosed." The 15 torch factories in Hong Kong used foreign brass to make the torch casing since it was cheaper than brass exported from Britain. The British Customs and Excise Department ruled that since brass constituted at least 40 per cent of the value of the finished product, unless British brass was used, torches should be classed as foreign and so be ineligible for admission to Britain free of duty. In 1935 the British Customs imposed a specific duty of 14 pence per pound on flashlight torches. This roughly doubled the cost of Hong Kong torches making it difficult for them to compete in the British market. Protests were made, but the British Customs refused to trust the costings supplied by Hong Kong showing a 50 per cent empire content and suggested that the factories should use empire brass exclusively for certain months of the year; if this was satisfactorily authenticated by an accountant's certificate Customs were prepared to allow Hong Kong torches to enter free of duty." Such arrangements were too complicated and expensive for most of the Chinese workshops involved, so they decided to do without imperial preference. Exports to Britain constituted less than 6 per cent of their total production."
58
These and other moves to limit Hong Kong's manufacturing exports provoked the governor to make a strong plea in unusually forthright terms to the Colonial Office for favourable treatment on the ground of Britain's imperial interests.
We are a tiny place and have no sufficient home market to support industrialization on any large scale. Between us and China there is a customs barrier and I do not see (with the rising tide of Chinese nationalism) any chance of their lowering the barrier for Hong Kong products. So if there is to be future for industrialization in Hong Kong its market must be a cheap and distant one, a protected market within our colonial empire. From an imperial point of view the question boils down to this. Is Hong Kong to be left just as a fortress port with a dwindling entrepot business or is it to be allowed to make up for what it loses on the entrepot swings by its takings on the industrial roundabout? Hong Kong has (except in the case of rubber) no near or cheap source of empire raw material, and so the empire content of its products will generally not greatly exceed the percentage which the cost of manufacture bears to the cost of material. If this is not
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