ENG-1956 — Page 25

ΙΟ

HONG KONG ANNUAL REPORT

itself called for a subtle combination of firmness, perspicacity, patience and understanding. In the economic sphere, how- ever, the impact of the refugees and other immigrants from China was not, by reason of a concatenation of circumstances, so disturbing as might have been expected. It is again necessary to look back over certain developments in the last ten years.

Immediately after the war the chaotic economic condition of Asia, and Hong Kong's own remarkable recovery, pro- vided an opportunity to widen the traditional entrepôt func- tion between China and the West so as to include goods moving to or from other areas in the Far East. Industry, which had its beginnings in the nineteen-thirties in relatively inefficient small-scale production, stimulated by Imperial Preference and later by the war in Europe, recovered more slowly. It was encouraged by the post-war scarcity of con- sumer goods, but it was also handicapped by the lack of raw materials, all of which had to be imported at a time when there was a world-wide shortage of shipping.

The increase of population up to 1949 has been called 'economic' immigration. It sprang from mainly economic causes, and in the economic sphere at all events Hong Kong was able to absorb it. The expansion of trade alone provided a reasonable and improving standard of living for all. Then came the victory of the communist faction in China and, shortly afterwards, the Korean War. The first event was responsible for the influx of the political refugees; and the second led to the American embargo on trade with China (and, initially at least, with Hong Kong), and later to the United Nations embargo on the export of strategic goods to China. Although she was faced with the problem of provid- ing in some way or other for a new influx of 700,000 people, and although the introduction of economic controls was likely to have a serious indirect effect on non-strategic trade, Hong Kong took immediate steps, more far-reaching than those taken by any other territory, to give effect to the em-