ENG-1976 — Page 36

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Industry and Trade

OWING to its heavy dependence on exports, Hong Kong's manufacturing industry feels more quickly than most the onset of any international economic recession or recovery. This sensitivity was evident once again during the recession of 1974–5 and the subsequent recovery.

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The first significant signs of recovery began to appear in early 1975 and con- tinued uninterrupted throughout 1976. The manufacturing industry benefited from this recovery to the extent that domestic exports in 1976 amounted to $32,629 million

43 per cent more than in 1975.

The major factors which have given Hong Kong its international reputation as a leading manufacturing and commercial centre are still at work. Among these 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 worldwide communications. There are no import tariffs and revenue duties are levied only in respect of tobacco, alcoholic liquors and some hydrocarbon oils. Tax 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-govern- ment'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 normally intervenes only in response to the pressure of economic and social needs and it provides no protection or subsidisation of manufactures.

Industrial Development

Light manufacturing industries which produce mainly consumer goods pre- dominate in Hong Kong. About 70 per cent of the total industrial workforce is employed in producing textiles and clothing, electronics, plastic products, toys, and watches, clocks and accessories. These industries account for about 78 per cent of Hong Kong's total domestic exports. They are likely to continue to predominate, although it is expected that more high technology industries will soon be located in new industrial estates. One such estate is under construction at Tai Po while another is planned for Yuen Long to bring a further measure of diversification to Hong Kong's industries.

Hong Kong industrialists have responded to the increasing competition from other developing countries in the region by continuing to modernise their operations and by moving into more sophisticated product lines. An increasing number of