ENG-1972 — Page 32

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Industry and Trade

HONG KONG's industrial and commercial sectors continued to expand in 1972. Al- though external trade registered the highest annual total ever recorded, the rate of growth in domestic exports slowed down to 10.9 per cent. Nevertheless, this must be considered satisfactory in view of the generally uncertain trading conditions created by the disturbed international currency situation, along with the increased protec- tionism and soft market conditions which continued to prevail in a number of Hong Kong's major markets. Provided the international trading climate does not deteriorate, Hong Kong should be able to maintain the progress recorded in 1972.

Many factors have contributed to give Hong Kong its international reputation as a leading manufacturing and commercial centre within Asia. Among them, an economic policy of free enterprise and free trade, an industrious work force, a sophis- ticated commercial infrastructure, a modern and efficient seaport, a strategically located airport, and excellent worldwide communications. Its access to markets in North America and close traditional trading links with Britain have also boosted Hong Kong's prosperity.

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Hong Kong is probably the only territory still completely faithful to liberal economic policies of free enterprise and free trade. There are no import tariffs, and revenue duties are levied only in respect of locally manufactured or imported tobacco, alcoholic liquors, table waters and some hydrocarbon oils. Duty is also payable on first registration of motor vehicles.

Economic planning is not a function of the government except in the very broadest sense. Apart from provision of the infrastructure, either through direct services or by co-operation with public utility companies and autonomous bodies, the government's role remains one of providing a suitable and stable framework within which commerce and industry can function efficiently and effectively with a minimum of interference. The government intervenes in economic processes only in response to the pressure of over-riding economic or social events. There is also no protection or subsidisation of manufactures.

The cornerstone of Hong Kong's commercial policy is the General Agreement on Tariffs and Trade (GATT), of which Hong Kong is a contracting party by virtue of the United Kingdom's membership. Developments in international commercial policy in and through the GATT are of vital importance to Hong Kong because of the possible impact on external trade, which in turn affects Hong Kong's industry and employment.

Hong Kong continues to participate in the Cotton Textiles Arrangement (CTA) which aims not only at increasing the export possibilities for cotton textiles of less