ENG-1975 — Page 29

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Industry and Trade

THE Hong Kong economy continued to be influenced by the world economic depres- sion for much of 1975. Soft market conditions, particularly in Europe and North America, seriously affected industrial production and exports. For some months unemployment and under-employment were apparent throughout the manufacturing industry and wages as well as profit margins declined.

However, there were indications by the middle of 1975 that business had started to improve and in the last quarter there was a strong growth. The value of domestic exports in December was 32 per cent higher than in December 1974, bringing the overall figure for 1975 to within 0.2 per cent of total exports for the previous year.

The major factors which have given Hong Kong its international reputation as a leading manufacturing and commercial centre in Asia are still at work. Among them are the economic policies of free enterprise and free trade, an industrious workforce, a sophisticated commercial infrastructure, a modern and efficient seaport, a strate- gically located airport, and excellent world-wide communications. There are no import tariffs and revenue duties are levied only in respect of tobacco, alcoholic liquors and some hydrocarbon oils. Duty is also payable on first registration of motor vehicles.

Apart from providing the infrastructure either through direct services or by co-operation with public utility companies and autonomous bodies the government's role in the economy is to ensure a stable framework within which commerce and industry can function efficiently and effectively with a minimum of interference. The government intervenes only in response to the pressure of over-riding economic or social needs and it provides no protection or subsidisation of manufactures.

The Commerce and Industry Department continues to maintain a close watch over oil stocks, sales and supplies, but it has disbanded the oil supplies unit which was set up in November 1973 following the Arab oil producing countries' decision to cut their output.

Industrial Development

The majority of Hong Kong's manufacturing industries produce light consumer goods. The textiles and clothing, electronics, plastic products, and toys industries account for about 70 per cent of the total industrial workforce and more than 70 per cent of total domestic exports. These industries are likely to continue to predominate, even though significant developments have been achieved in heavier industries during recent years and more can be expected.

In response to increasing competition from other developing Asian countries, local industrialists are continuing to modernise their operations and to move into