ENG-1967 — Page 79

INDUSTRY AND TRADE

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with these circumstances—all of them outside Hong Kong's control and some of them fortuitous-must also be considered the political stability of the territory and its encouragement of enterprise. There has been a steadfast policy of preserving free competition, of generally refusing to accept demands for protection of particular industries or demands for retaliation against other countries' restrictive actions. Widespread skill in merchandising techniques inherited from the entrepôt era, plus highly developed banking, insurance and shipping systems, have helped to make this policy successful. For Hong Kong the industries likely to survive and prosper are those whose products can either be exported without subsidy or be sold in the domestic market without protection. Hong Kong has therefore remained true to the traditions established when it was an entrepôt, with no tariffs and few restrictions on the entry of goods from any quarter of the globe.

In matters affecting internal and external trade, the Director of Commerce and Industry is assisted by advice from the Trade and Industry Advisory Board. This is a body of unofficial senior repre- sentatives of commerce, industry, banking, etc, nominated by the Governor, of which the director is chairman. It meets regularly at least once a month. A more specialized board, the Cotton Advisory Board, first appointed in 1961, is consulted on matters affecting the cotton textile industry.

During the year, industry has had to accept the disruptions caused by rioting, water shortages, reduced public transport and the devaluation of sterling. That it has managed to meet all these difficulties and still achieve a 17 per cent increase in the value of domestic exports during 1967 shows the basic strength of the economy and augurs well for the future.

INDUSTRY

The general facility with which industry may be established and conducted in Hong Kong has attracted investors. Most indus- trialists are Hong Kong residents of Chinese race, and the greater part of their capital resources are self-generated. In recent years, however, overseas interests-in particular American, Australian, British and Japanese-have increasingly entered into licensing arrangements with Hong Kong firms and into other forms of