ENG-1969 — Page 26

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HONG KONG MANUFACTURING INDUSTRY IN THE SIXTIES

important financial and shipping sectors, the re-export trade, the contribution of the primary sector, and so on, but the principal focus is on manufacturing industry.

Precise quantification of changes in the scope and pattern of manufacturing industry is not feasible in the absence of output statistics (towards which Hong Kong is cautiously feeling its way), but for reasons mentioned above, a good general picture emerges from examination of domestic exports. The graph on page 3 depicts broad trends in manufacturing employment, the number of factories registered or recorded with the Labour Department, and output as indicated by export values. It illustrates in general terms that increased production has been accompanied by increased productivity in terms of output.

THE SCOPE AND PATTERN OF MANUFACTURING INDUSTRY

Whether one measures the relative importance of particular industries by the value of exports (Table 1), or by numbers employed in registered or recorded establishments (Table 2), the overwhelming importance of textile manufactures both in 1959 and 1969 emerges very plainly. Taken all together, yarns and fabrics and clothing represent about a half of all manufactures in terms of either export value or of employment. But inside these broad textile groups, the changes are highly significant. To understand them, it is necessary to go back to 1959.

Spinning and Weaving

In that year, the textile industry was for the first time forced to pay the penalty of its success in supplying the market in Britain with cotton yarn and fabrics when, under pressure from the British industry and Government, it reluctantly undertook to limit exports of these goods to Britain, the Hong Kong Government agreeing to administer the necessary controls. One of the effects in due course was to encourage the industry to seek other outlets for the surplus capacity of its spinning and weaving mills either overseas or, more importantly, by sales of finished cloth to Hong Kong's garment industry. This in turn brought about expansion and diversification of finishing capacity.