ENG-1967 — Page 41

REVIEW

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at substantially higher levels than in previous years. The tourist trade continued satisfactorily in spite of alarmist headlines in some overseas newspapers. At the height of the disturbances substantial deposits were withdrawn from banks but, as most of the sums withdrawn were converted into Hong Kong currency, outflow of capital was contained within fairly narrow limits, although it was accelerated to some extent in June by the Middle East crises and consequent pressure on sterling. Their strong liquidity position enabled the banks to withstand these withdrawals without difficulty and without imposing any serious restriction on credit. From the end of August deposits began to return to the banks at a satisfactory rate. There had been no significant adverse effects on public revenue.

The bus companies, which were perhaps the hardest hit by confrontation, have made substantial progress in getting their fleets back on the road; other public transport services were almost back to normal at the end of the year. When on June 7, voting took place for five vacant seats on the Urban Council, the election passed off without incident and, indeed, a record percentage (for Hong Kong) of the electorate cast their votes. Confrontation did not affect such annual events as the cross harbour swimming race, the dragon boat races and the Cheung Chau bun festival while, in the autumn, the racing and football season started on schedule. A determined attempt was made to wreck Hong Kong Week which was held between October 30 and November 5 to publicize Hong Kong products. But, in spite of a marked increase in explosive attacks, the colourful festivities took place as planned and met with an enthusiastic reception from the many visitors who attended. The Chinese Manufacturers' Association's Jubilee Exhibition, in December, attracted a record number of visitors.

For many people the main preoccupation during the summer has been not so much confrontation as the water supply position. Hong Kong has no sizeable rivers and it is dependent on rainfall which is collected in reservoirs. By the current agreement with China, an additional 15,000 million gallons of water (which is paid for at the rate of $1.06 for a thousand gallons) is provided from her more ample resources each year, to be drawn during the period from October to June. By the end of 1966 the storage position was causing some anxiety and by an ad hoc agreement a further 1,800