ENG-1946 — Page 68

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to factories almost solely for the production of cloth linings for the rubber shoe industry. In addition some enterprising firms bought yarn at a high cost from China and went into production; but the products were very expensive and became increasingly difficult to sell. At the end of the year over 5,000 bales were en route from Japan and it was hoped to secure regular supplies sufficient to keep the industry at not less than 50% of full production. The knitting industry was in similar circumstances at the re-occupation, except that no captured stocks of raw material were available. The button making industry is one which recovered more rapidly since large supplies of raw materials such as ivory nuts, bones and mother-of-pearl are available locally. As a result the Hong Kong button makers were able to capture some of the markets formerly supplied by their Japanese competitors.

Production of Rubber Shoes.

At the end of 1946 the production of rubber boots and shoes was about 20% of pre-war. Whereas the trade used to be mainly with the United Kingdom, South Africa and the Netherlands East Indies, post-war export was primarily to China, Siam and Annam. Lack of adequate supplies of material, damage to buildings and loss of machinery prevented the larger factories from re-opening, but there was a consi- derable growth of small factories. Although the cost of production was about ten times as high as pre-war, and wages about seven to ten times, markets were not hard to find owing to the world-wide shortage of the products and the temporary elimination of most low-cost competitors.

Paint Industry.

The paint industry recovered during the period under consideration to about 70% of its pre-war production. Little machinery had been lost and most of the materials used can be imported from China. The four pre-war factories resumed operation and their combined production for the year was about 305,000 gallons. Half of this was sold locally and the remainder found an easy market in Malaya, Netherlands East Indies and India. The price was about 200-250% of pre-war. Tobacco and Match Industries.

There were adequate stocks of low-grade leaf tobacco and cigarette paper in the Colony at the time of the re-occupation to keep the principal factories operating until new stocks arrived and by the end of the year production was approach- ing the pre-war level. In the local market considerable competition is met from the U.S.A. and United Kingdom products. The two match factories were fully up to pre-war production in 1946 (2,400 gross boxes in all per month). Costs were very high at first owing to the difficulty of obtain- ing timber and chemicals, declining by the end of the year to