ENG-1976 — Page 37

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INDUSTRY AND TRADE

component parts for existing lines are being produced locally and the quality of finished products continues to improve.

About 8.1 per cent of Hong Kong's total industrial workforce of 773,746 people are employed in factories owned or partly owned by overseas interests. In order to broaden Hong Kong's industrial base by bringing in more expertise and new in- dustrial technology, increased efforts were made during 1976 to encourage overseas industrialists to invest in Hong Kong's manufacturing industry. Missions were sent to Australia, the Federal Republic of Germany, Switzerland and the United States.

Textiles and Clothing

The textiles industry is Hong Kong's most important industry, employing about 48 per cent of the total industrial workforce and accounting for some 53 per cent of Hong Kong's total domestic exports. The upturn in overseas demand for textiles-- particularly clothing--which started in the third quarter of 1975, continued during 1976. As a result, the value of Hong Kong's domestic exports of textiles and clothing for the year was the highest figure ever recorded. But despite the textiles industry's strong recovery from the effects of the world economic recession, the restrictions on Hong Kong's textiles exports to most of its main markets under the GATT Multi- Fibre Textiles Arrangement have limited the industry's scope for further growth in volume.

The spinning sector, operating about 898,912 spindles, contains some of the most modern factories in the world. In 1976 there was a considerable increase in the demand for most textile yarns-particularly cotton yarn, production of which amounted to 431 million pounds compared with 382 million pounds in the previous year. Production of man-made fibre yarn and cotton/man-made fibre yarn increased by 17 per cent to 70 million pounds, and the production of woollen and worsted yarn was 16 million pounds compared with 13 million pounds in 1975. Most of the yarn produced was used by local weavers. The possibility of a world shortage of raw cotton in 1977 and also a sharp rise in the price of imported cotton during the year caused some concern among cotton spinners.

The weaving sector, with 31,346 looms, produced 1,110 million square yards of woven fabrics of various fibres and blends, compared with 915 million square yards in 1975. The bulk of the production-90 per cent--was of cotton. This sector of the industry benefited significantly from the so-called denim boom of 1976, when the use of denim as a fashion as well as a utility fabric gained worldwide appeal. There was a sudden expansion in manufacturing capacity, but many of the smaller factories which had sprung up to take advantage of the situation ceased operation as the boom faded during the second half of the year.

The knitting sector also saw increased production. In 1976 Hong Kong exported 20 million pounds of knitted fabrics--of which 45 per cent was of man-made fibres or cotton/man-made blended fibres and 55 per cent of cotton-compared with 14.8 million pounds in 1975. A large part of the production of knitted fabrics of all fibres was used by local clothing manufacturers.