ENG-1958 — Page 24

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HONG KONG ANNUAL REPORT

scepticism) that there is a large and widening range of genuine Hong Kong products. But this has not solved all Hong Kong's difficulties.

Lack of foreign exchange has from time to time affected the ability of other countries to purchase Hong Kong goods. The fluctuations in the percentage of the Colony's total exports ab- sorbed in recent years by, for example, Indonesia, a natural market for the Colony's products, is a reflection of this: 1954- 9%; 1955-8%; 1956-16% (in this year Indonesia was the Colony's best customer); 1957-10%; 1958-7% (now fallen to fifth place).

Since the war the growth of light industries in countries such as Thailand, the Philippines and the West Indies, which formerly relied mainly on primary production and are now trying to diversify their economies, has affected their willingness to accept competing manufactures. This difficulty is clearly likely to increase. With its free trade policy and almost complete absence of import duties, Hong Kong is not in a position to bargain with these countries in defence of its exports.

One natural consequence has been that Hong Kong has had to seek outlets for its goods in more developed countries, where the emphasis on cheapness is not so great and better quality is a real consideration. In countries such as the United Kingdom, the United States, Canada, and South Africa, opposition has imme- diately arisen because the comparatively low price of Hong Kong goods has affected long-established domestic industries, and it is from these countries that accusations of sweated labour, poor quality goods, dumping, pirating of designs, etc., have come. The principal attacks have been on the textile industry, dealt with in more detail below.

Despite the protection provided by the General Agreement on Tariffs and Trade, the past five years have seen various moves made to discriminate against Hong Kong's exports, directly or indirectly.

Some examples can best illustrate this trend. In 1955 the Irish Republic raised its tariff against Hong Kong gloves. In 1956 South Africa attempted to enforce anti-dumping legislation against Hong Kong and in 1957 it imposed alternative specific duties on a wide