ENG-1948 — Page 49

portunity to liquidate these stocks was presented when supplies from America fell away owing to the shipping strikes in that country. Nevertheless, a number of mushroom firms which had come into existence after the war were not able to stand the strain of the recession and faded out. The Hong Kong internal com- mercial position is rapidly reverting to its pre-war pattern in which trade is dominated by the older established and more financially secure merchant house.

A number of interesting features were prominent in the trad- ing position throughout the year. On the import side, textile fabrics led the way, followed by yarn, hydro-carbon oils, manu- factured articles, cereals, chemical elements, and vegetable oils. In exports, textile fabrics pre-dominated but there were large exports of vegetable oils, manufactured articles, and manufactures of base metals.

The main sources of imports in round figures during 1948 were China ($430 millions), United States of America ($387 millions), United Kingdom ($300 millions), and Siam ($96 millions) and the main destinations of exports were China ($280 millions), Malaya ($204 millions), U.S.A. ($152 millions), Siam ($140 millions), Philippines ($136 millions) and Macau ($136 millions). Imports from the British Commonwealth totalled $579 millions, an increase of no less than 30% over 1947, and are now 27% of the total imports. Exports to the Commonwealth totalled $411 millions, an increase of 14.7%, and are now 26% of the total exports. Imports from the United Kingdom were almost double those of the previous year and other large increases in im- ports were recorded from Italy, Japan, N.E.I., Siam, Sweden, Holland, Korea, Macau and the U.S.A. Imports from the U.S.A. in fact increased to such an extent that they almost equalled those from the whole of China. Exports to the Philippines increased over two-fold as the new Republic became Hong Kong's fifth largest customer.

A lively trade sprang up with Korea which has become an imporant source of supply and an equally important market for Hong Kong. Before the war when Korea was a Japanese posses- sion, trade between that country and Hong Kong was negligible. As political conditions improved in South-East Asia, trade began to move in larger volume. In particular, trade with Indonesia showed marked gains as imports were nearly twice the amount for the previous year while exports also increased considerably.

The most disturbing feature of Hong Kong's trade was the general decrease in the trade with China. While some increase was recorded in trade with North China, trade with South China fell away rapidly. Before the war, about 40% of Hong Kong's

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