ENG-1961 — Page 92

INDUSTRY AND TRADE

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attracting new investment. The merchant houses played a sub- stantial part in this development. The first years of the Second World War provided an additional stimulus, when locally made military and civilian supplies again partially replaced imports from overseas, and it is estimated that by the end of 1940 there were some 800 factories in the Colony.

Factory rehabilitation, after almost four years of enemy occupa- tion, was rapid, impelled by an acute shortage of consumer goods throughout war-scarred south-east Asia. The year 1948, when the influx of refugees from China reached its peak, was a vital one for local industry: most of the refugees arrived destitute, but many brought capital and technical skills both of which found ready employment in Hong Kong.

When the Korean War and the resultant embargo on trade in strategic commodities with China drastically reduced the volume of Hong Kong's commerce, only industrial expansion could offset the dangers threatening economic stability and provide employment for the greatly swollen and still growing population. Local in- dustrialists reacted quickly to the new situation, and despite diffi- culties in obtaining certain raw materials, an increasing volume and-range of Hong Kong products from many new and re- invigorated industries began to flow out to world markets.

Today there are 6,359 registered and recorded factories employ- ing 271,729 persons. Registration figures for 1961 will be found in Appendix I. In addition, a large number of smaller concerns, mostly pursuing traditional Chinese handicraft activities employ over 150,000 people.

Most industrialists are members of the Colony's Chinese com- munity, although there are several important ventures owned and operated by non-Chinese or on a joint basis. Several overseas interests have also entered into licensing arrangements with local firms, authorizing the manufacture of products under internation- ally famous brand names.

Although no special benefits are available to industry by way of profits tax or import duty concessions, the general facility with which industry may be established and conducted has proved attractive both to local and overseas investors. Apart from a very few revenue-producing duties, the Colony is a free port and Government regulation of trade is kept to a minimum.