ENG-1985 — Page 11

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HONG KONG IN TOUCH WITH THE WORLD

Yet amid the prevailing pessimism there flickered more positive attitudes. By May 1847, the trader Alexander Matheson was able to tell a House of Commons Select Committee that 'the Chinese showed every disposition to frequent the place, and there was a fair prospect of it becoming a place of considerable trade.'

While London, cut off from Hong Kong in more than a physical sense, chose to ignore the pessimists, there was a basis for complaint. Even for the purpose of trading, Hong Kong in its early days presented on unattractive prospect for its first settlers. Dispirited by the climate, to which they made little concession in regard to clothing or more abstemious appetites, the settlers soon came to fear the typhoons which arrived with little warning to batter their flimsy shelters. Crime was a significant problem. With disease beyond the control of those who misunderstood its causes, the cemetery filled up.

Tenuous communications, with home and even with Canton, depending on the vagaries of the sea, the weather and the pirates, added to the problems of traders and of the government, who already had to deal with a currency mixture of British coins, Spanish and Mexican silver dollars, rupees and Chinese Cash - a small coin rated at 280 to the shilling. And yet, in mid-1984, the Financial Secretary, Sir John Bremridge, the 18th successor to the pessimist Martin, and 140 years removed from his negative outlook, was able to note that in the preceding decade, Hong Kong's Gross Domestic Product (GDP) had grown by an average of eight per cent a year, and to forecast that in the decade to come its per capita GDP 'could with a bit of luck be of the same order as that in the United Kingdom.'

Supporting this prediction, Sir John could point proudly to the post-war achievements of the settlement on which Martin had maintained that a shilling spent was a shilling wasted: Hong Kong is the financial capital of Asia, and the world's third most important -banking and financial centre, trailing only London and New York;

Hong Kong is the world's largest exporter of garments, toys, radios and watches; Hong Kong is among the world's top 20 trading countries and territories, it has the world's third busiest container port and the third busiest air cargo operation. Hong Kong is also the world's third biggest gold market, and a leader in the diamond trade;

Of the world's top 50 banking groups, 44 are represented in Hong Kong and the territory's own big bank, the Hongkong and Shanghai Banking Corporation, is among the world's top 20 banks - and the biggest based outside the major industrialised countries of Europe, North America and Japan.

This is the position of Hong Kong in the mid-1980s. Yet how and when did the former entrepôt port become the wealthy banking centre, the busy world trader, the diversified manufacturer it is today?

The Years of Industrial Growth

Hong Kong has been both beneficiary and victim of an accident of geography. Little more than a dot on China's southern flank, it is also on the edge of the Pacific Basin, with all that implies for trading opportunities in such a dynamic area. But by December 1941, this same geographical position made Hong Kong an obvious strategic target in the Pacific War. At the start of World War II, Hong Kong's population, swelled by refugees from southern China, was some 1 600 000. By the end of the war, and three and a half years of Japanese occupation, this had slumped to about 600 000. Yet by late 1947 the population had rebounded to 1 800 000, topping the pre-war figure, and by mid-1950 the population was estimated at 2 200 000.