ENG-1974 — Page 29

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INDUSTRY AND TRADE

was caused to industrial activities. Similar efforts were maintained to preserve normal industrial production when Hong Kong faced a temporary shortage of water in October.

In the wake of intensified world-wide shortages of plastic raw materials the Com- merce and Industry Department took an unprecedented step in introducing at the beginning of the year licensing arrangements to monitor the re-export of all plastic materials.

Subsequently an export quota system was also instituted with a view to retaining for local consumption the major items which had been imported. When the supply situation improved around the middle of the year, the quota system was discontinued. This was followed by the removal of the licensing arrangements four months later. Throughout the period when the re-export of plastic materials was controlled, the Commerce and Industry Department was at pains to preserve the traditional re-export trade and the role of Hong Kong as a distribution centre.

Industrial Development

Light industry continues to predominate in Hong Kong and consumer goods remain the major lines of production. It is likely that this theme will continue in the foreseeable future although an expanded growth rate is likely to be experienced in sophisticated and heavier industries.

The quality and diversity of Hong Kong's consumer products continued to im- prove in response to further growth in manufacturing skills, the demands of the markets and competition from newly industrialising countries. Increased consumer protection activities in many developed countries also stimulated further improvements in the quality of some products.

In general, industry was able to weather well the unfavourable conditions which were imposed on it by disruption in supplies and increases in cost of raw materials and the general depression in economic activities in the world's major trading nations. Labour costs, which had been rising in recent years, levelled off in 1974 and total industrial employment fell. Although the situation was by no means uniform through- out all industrial sectors and among all factories within each sector, there were signs of an improvement in orders, and consequently production levels, by the end of the

year.

Many institutional organisations, with assistance and financial aid from the government, support industry in its efforts to upgrade production, management and marketing techniques, standards and industrial design. These efforts are supported by the Commerce and Industry Department, which is also responsible for the promotion of overseas investment in Hong Kong industry.

About 11 per cent of Hong Kong's 600,000 workers in the manufacturing industry are employed in factories owned or partly owned by overseas interests. Several plants in the process of establishment under a modified industrial land policy began con- struction during 1974 and further ventures, including an oil refinery-petrochemical complex, were under consideration. Within the framework of the modification of indus- trial land policy promulgated in 1973, the government also set up an official working