ENG-1963 — Page 101

6

Industry and Trade

GENERAL REVIEW

HONG KONG may perhaps be included among what are now usually described as developing countries. It is unique among such terri- tories in the dependence of its economy on industrialization. No less than 40 per cent of the labour force is engaged in the manu- facturing industry, an estimated 90 per cent of whose production is exported. Furthermore, as Hong Kong is a free port, its in- dustries have grown up exposed to the full competition of products from the most industrially advanced countries. They enjoy no form of protection and few special advantages, but important among these is stability of administration and currency, and access on preferential terms to the markets of Britain and a number of the smaller Commonwealth territories under the Ottawa Agreements of 1932. Since 1952, because of American restrictions on products originating in the Peoples' Republic of China, Hong Kong has been in a position to supply the United States market with like products, which has stimulated the growth of certain kinds of industry. Finally, the Government grants concessionary terms regarding terms of payment for Crown land sold with limitation to industrial

users.

Exposure to world competition puts a premium on industrial efficiency. Industry and exports have expanded with remarkable rapidity and the standard of living of the population has un- doubtedly risen in the face, not only of natural increase at a rate normal by Asian standards, but of immigration on a scale un- paralleled for so small a territory.

But this very success has provoked a reaction among some advanced countries, and rather less than liberal policies are now being applied in international trade in the product in which Hong Kong has been most successful, that is, textiles.

The development of industry has coincided with the decline of the entrepôt trade with the Mainland. This has not faded away