ENG-1952 — Page 27

HONG KONG ANNUAL REPORT, 1952

activities to the changed conditions under which ship- ments of strategic goods to China were banned, and either found new markets overseas or concentrated on supplying the local market and local industry.

The early months of 1952 were considerably affected by a campaign carried out by the Chinese People's Government against internal corruption, during which both imports of China products and exports of such goods as could legitimately be shipped to China almost came to a standstill. This campaign was com- pleted in May, 1952, and thereafter trade with China in goods which the Governments of both sides were willing to exchange gradually picked up.

Dullness in the trade with China during the first half of 1952 coincided with unfavourable trading con- ditions elsewhere and had a generally depressing effect, with the result that for the first six months of the year trade fell away to levels last experienced in the middle of 1950. Much capital was tied up in the heavy stocks imported during 1951 and it was not until the summer that the majority of these stocks were absorbed locally and indents for new supplies began to come in. From July onwards there was a slow but steady increase in the volume of trade, in spite of occasional fluctuations between one month and the next, but even in December, when the highest figure for the year-£42 million-was recorded, business was still comparatively dull and depressed.

A notable feature of the year was the extent to which export trade with Indonesia, Formosa, Thailand and other territories in South East Asia developed. Indonesia for the first time in Hong Kong's history

12