ENG-1955 — Page 77

Chapter 6: Industry and Trade

In the last ten years the pattern of Hong Kong's economy has changed profoundly, and industry which, prior to the Second World War, was only of minor importance, has now assumed the major rôle.

The Colony's first industries were in the nature of services allied to the development of the port. The earliest was, of course, shipbuilding and repairing. The first locally- built vessel, the Celestial, 80 tons, was launched in 1843. Two sugar refineries were established, the first in 1878, the second in 1882, not so much to satisfy the needs of the then small local population, but the requirements of ships' victualling officers. In 1885 a rope factory was started, again primarily to cater for the seafaring trade. A cement factory was transferred to Hong Kong from Macau in 1899.

At times there were tentative efforts to set up new modern industries, but these faded out, like the spinning mill which was started in 1899 and closed down a few years later. However, some industries obtained a firm foothold, such as the manufacture of rattanware, which started in 1902, and of cotton knitted singlets and vests, which started in 1910. These however flourished more or less unnoticed amid the Colony's growing entrepôt activities.

The first real stirrings in industry occurred during the First World War, and in the years following there was some expansion. A weaving factory, operating 30 hand looms, was established in 1922, and in 1927 the first flashlight factory came into being.

It was the Ottawa Agreement of 1932, under which Hong Kong products became entitled to Imperial Preference, which provided the first major encouragement to local industry, assisting existing manufacturers to seek wider markets for their goods and attracting new investors. Additional stimulus was provided in the first years of the Second World War, when locally-manufactured military and civilian supplies aided the Allied cause. It is estimated that in 1940 there were about 800 factories.