ENG-1981 — Page 19

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REVIEW

doggedly sticks to excluding under the Generalised Scheme of Preference some potential Hong Kong products that might help close the big 11 to one trade gap; as well as erecting obstacles, like long delays in qualifying for its quality stamp of approval that guides Japanese consumers in the choice of what they buy in their shops. This behaviour is increasingly not accepted with indifference in Hong Kong.

Hong Kong's trade gap with China is seen in a more generous light. Though young Hong Kong belongers may look outward on the world for their own destiny they do glance backward across the border at the plight of their ethnic brothers. Help for them is approved because they know what drove their mothers and fathers to leave their homeland. Remit- tances remain quite common and annual visits begin heavily laden with everything they know their relatives might need. Investment in light industries in the special economic zones China has established across the Hong Kong border are as much to do with that sentiment as cheaper labour which Hong Kong generally finds less productive than its own.

Luxury Buying

Another result of the ethnic-brother sentiment is that Hong Kong's domestic market is bigger than might be expected for the size of its population and measurements of disposable income. One never knows where any imported item might end up, such is the totality of Hong Kong's open trade-door policy. The result is that Hong Kong, for instance, has more British Rolls Royces per road-mile than anywhere else. Though it has beaten Switzerland in export volume of watches, Hong Kong is still Switzerland's second largest export market for custom-made gold watches. Hardly an haute couture in Europe is not represented in Hong Kong with one or more retail outlets. Half of Hong Kong's leading department stores are Japanese. Even Mercedes Benz motor-cars are more often seen on Hong Kong streets than in the average West German city. Hong Kong is France's second biggest export market for brandy and a big buyer of its perfumes, though France seeks to limit our watch exports to her.

Hong Kong's rapid growth also provides a market for the world's heavy industries. Capital investment in the expanding infrastructure benefits the developed countries. Hong Kong's current order to Britain for electric power generating plant is the biggest Britain has ever received. The construction of Hong Kong's underground mass transit railway has spread big contracts around Europe, United States and Japan. The electrification and double-tracking of its railway to the China border is also helping keep Britons and other Europeans in employment. A bridge, longer than San Francisco's Golden Gate, a new airport and another new town are on Hong Kong's drawing boards.

Its free money market and its stability has attracted considerable foreign investment in industry from abroad and in technology transfer. Americans, Japanese and West Germans are able to remit their profits besides making products more cheaply and better in Hong Kong than they can often do in their own countries. But Hong Kong is no longer a cheap labour market and the result is, for example, a foreign toymaker may well decide to make his rag dolls in the Philippines, his die-cast toys in Malaysia, Taiwan or Indonesia and produce his electronic games in Hong Kong. The Hong Kong pressure-cooker is forever bubbling out more sophisticated workers from its social chemistry.

Some of Hong Kong's imports may smack of affluent living, amid relative poverty. But the picture is tempered by nearly two and a half million tourist buyers annually and the near- totality of Hong Kong's free port status. For instance, Japanese tourists prefer Swiss watches that don't look like Japanese cheaper brands and they look for the most exclusive brands of European-woven cloth for the suits they have made quickly and efficiently in Hong Kong.