Sessional_Paper_1935 — Page 97

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Chapter IX.

HIGH COST OF LIVING IN HONG KONG.

1. One would naturally expect to find wages and the cost of the necessaries of life on approximately the same level in Hong Kong and in the adjoining territories of South China. The Colony is physically an integral portion of China, her popu- lation is predominantly Chinese, on whose movements inwards or outwards there are no restrictions; no duties are levied on foodstuffs and communications are cheap and frequent. In fact it ought to be cheaper to live in Hong Kong which apart from moderate revenue duties on liquor, tobacco and petrol, is a free port, than, in China which maintains an extensive tariff barrier on imports. Nevertheless it is not so. and both wages and the cost of living are substantially higher in the Colony. Several reasons might be adduced, in theory at any rate, to explain this pheno- menon. Taxation, regulations imposed by Government, currency, rent monopolies or manipulation of prices, higher standard of living one or all might be cited as the contributing cause. They all have a bearing

They all have a bearing on the Colony's economic con- ditions and merit a measure of analysis.

2. The cost of Government, ultimately represented by taxation, is undoubtedly a primary factor. Yet not one witness before the Commissioners contended that excessive taxation handicapped his business ris-a-vis his competitors elsewhere. Nevertheless so much loose thinking exists on the subject of public expenditure and the burdens it connotes that it should be scrutinised and placed in its proper . perspective.

3. The Government of the Crown Colony of Hong Kong is a trinity. It com- bines the functions of a State Government, a Municipal Council and of a Harbour Authority. These activities are so intertwined that it would require a separate commission to disentangle them. The following tables represent a rough and ready classification of expenditure and revenue under these three heads. They do not claim in any sense dogmatic accuracy and are presented merely to provide material indispensible for the comparative study of Governmental systems in the Far East. The geographical restriction is important because Western Governments render a multitude of expensive social services, such as social insurance, compulsory educa- tion, etc., which have not yet been introduced into this part of the world. Further- more, the taxable capacity of Asiatics stands on a much lower plane.

TABLE "A".

EXPENDITURE (1933).

Military Contribution

Public Works, Extraordinary Other items of expenditure

Grand totals

Government Harbour Municipal

Grand total

Colonial.

Harbour.

Municipal.

$ 5,694,558 1,056,926 10,324,002

87,111 1,107,354

2,148,312 10,702,014

17,075,486

1,194,465 12.850.326

TABLE "B".

REVENUE. (Approved estimate for 1934).

$18,436,850

1,131,300

12,160,475

31,728,625