ENG-1962 — Page 93

6

Industry and Trade

INDUSTRY

SINCE 1949 the pattern of Hong Kong's economy has changed. Industry, which before the Second World War was of secondary importance to the entrepôt trade, has assumed a dominant role and over three-quarters of the Colony's total exports are now manufactured or processed locally. Hong Kong's first industries were services allied to the development of the port and the earliest was naturally ship-building and repairing. The first locally built vessel, the Celestial of 80 tons, was launched in 1843. Two sugar refineries were established in 1878 and 1882, not so much to satisfy the needs of the then small local population as to meet the requirements of ships' victualling officers. In 1885 a rope factory was started, again primarily to cater for the seafaring trade, and a cement factory was transferred to Hong Kong from Macau in 1899.

From time to time there were efforts to set up new industries. Some were unsuccessful; a spinning mill was started in 1899 but closed down a few years later. Some industries, however, obtained a firm foothold. In 1902 the manufacture of rattanware began and in 1910 the knitting of cotton singlets and vests became established. These, although flourishing, went more or less unnoticed amid the Colony's growing entrepôt activities. The First World War gave some impetus to the development of industry when the Colony was denied various manufactured goods from European sources, and the immediate post-war years also saw some expansion. A weaving factory, operating 30 hand looms, opened in 1922 and was followed five years later by the first flashlight factory.

The Ottawa Agreements of 1932, under which Hong Kong prod- ucts became entitled to Imperial (now Commonwealth) Preference, were the first real encouragement to local industry, enabling manu- facturers to seek wider markets for their goods and attracting new investment. The merchant houses played a substantial part in this