ENG-1948 — Page 50

trade was with China, and this has now been reduced to less than 20%. Imports from China generally were about equal to those of 1947, while exports showed a slight improvement. The disturbed political conditions in China and the stringent import controls were responsible for the grave reduction in Hong Kong's trade with her great neighbour. It had been hoped that there would be some improvement in the internal situation in China, but these hopes did not materialise and it would appear that no improvement in the China trade can be expected in the near future.

In contrast, trade with Japan, in spite of the many admini- strative difficulties, went from strength to strength. Imports totalled almost $79 millions while exports were nearly $50 millions. Imports from U.S.A. showed a considerable increase. This was to be expected since the Far East continues to make heavy demands on America for manufactured goods of all kinds. Trade with Australia and Canada also showed big increases both in im- ports and exports particularly of manufactured products. There is still a shortage in many lines of manufactured goods, particularly capital equipment. While there is a growing tendency to look to the sterling area for such commodities, nevertheless, it would appear that the Far East will continue to lean on the United States for some time to come. The freedom of movement of commodities and the absence of restrictions on trade with the sterling area are proving a big attraction in increasing the trade in the Colony with the Commonwealth, and sales of local products in the Middle East, British Africa and the West Indies have been an encouraging feature of the trade during 1948.

Profits have remained good throughout the year, and there has been, in local trading circles, an easy-money position. There is much capital in the Colony awaiting investment but disturbed political conditions throughout the Far East have tended to dis- courage long term investment in favour of holding funds in a more liquid condition.

At the end of this chapter are a number of diagrams illustrating in greater detail the trade movements briefly described above not only in the year under review but also during the period 1933-47 with the exception of the years of Japanese occupation

1941-45.

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