ENG-1975 — Page 30

INDUSTRY AND TRADE

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more sophisticated product lines. Within existing lines, more component parts are being produced locally and the quality of finished products continues to improve. In the earlier months of 1975 the world-wide recession resulted in the textiles (except clothing), electronics and plastics industries being particularly hard hit by the fall in consumer demand in some of their most important export markets, and this led to a reduction in employment. But by mid-year the demand was seen to be picking up and by the third quarter most factories were able to re-engage labour and resume full time working. Factories in the clothing and watches and clocks industries managed to withstand the effects of the recession particularly well and certain sectors of these industries produced substantially more than in the previous year.

About 8.7 per cent of Hong Kong's 678,857 workers in the manufacturing industries are employed in factories owned or partly owned by overseas interests, and several new subsidiaries of overseas companies were in the course of being established at the end of the year. In order to broaden Hong Kong's industrial base, the government increased its efforts to promote industrial investment and sent missions to Australia, Britain and the United States during 1975. In a further move to encourage the development of a wider range of industries, the government decided to construct Hong Kong's first industrial estate for land-intensive industries near Tai Po in the New Territories. Work on site formation began in November and the possibility of establishing further estates is under investigation.

Textiles

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Despite the drop in overseas orders in the early part of the year, the textiles in- dustry remained the mainstay of Hong Kong's economy, employing approximately per cent of the total manufacturing workforce and accounting for about 54 per cent of domestic exports. The world economic recession affected the spinning, weaving and finishing sectors of the industry, with most factories operating below capacity for several months. Employment was relatively low, although by the end of the year there was a substantial improvement compared with the first quarter. The new multi- fibre restraint agreement concluded with the European Economic Community in July under the GATT Multi-Fibre Textiles Arrangement caused some disruption to production.

The spinning sector, operating about 895,300 spindles, contains some of the most modern factories in the world. Although many mills operated below capacity for much of the year, the production of cotton yarn in 1975 was 357 million pounds, compared with 328 million pounds the previous year; man-made fibre yarn and cotton and man-made fibre blended yarn dropped by 18 per cent to 60 million pounds; and woollen and worsted yarn was 13 million pounds compared with 14 million pounds in 1974. Most of the yarn produced was used by local weavers.

In 1975 the 26,575 looms in the weaving sector produced 847 million square yards of fabrics of various fibres and blends, compared with 805 million square yards in 1974. As in previous years the bulk of the production-87 per cent-was of cotton. The knitting sector exported 15 million pounds of fabrics—of which 62 per cent was of man-made fibres and 38 per cent of cotton. A large part of the production of knitted fabrics of all fibres was used by local clothing manufacturers.

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