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ANNEX Page 102 of 203
INTERNAL POLICIES OF THE HONG KONG GOVERNMENT
Background
1.
Hong Kong's post-war development, despite a seven- fold increase in the population, political uncertainty and a total absence of natural resources, has been remarkable. In the period 1945-71 (and particularly after 1961) the Colony achieved a remarkably high rate of growth with steadily increasing real wages per head (about 5% per annum), full employment, a sound balance of payments and relatively little inflation. This success was the result
of five principal factors:
(1) the rapid growth of post-war demand in its major export markets, particularly in North America and Western Europe;
(ii) a plentiful supply of labour used to very low
cash incomes and with sociological attitudes peculiar to an immigrant society;
(iii) an inflow of entrepreneurial and financial
expertise from the mainland (and, in the early years, an inflow of Chinese capital, mainly from Shanghai) married to the existing efficient financial and commercial infrastructure;
(iv) a stable and efficient colonial government; (v) a general climate favourable to investment
e.g., the tax structure, absence of exchange controls and of import duties (save on drink, tobacco and oils).
It should be noted that with the exception of (iv), these factors also applied to other countries in the region with good economic development e.g., Singapore, Taiwan.
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