Pami H.
HON
10 OCT 1966
UNIVERSIT
ANNUAL
DEPARTMENTAL
REPORTS
KONG
1964-65
NG
DIRECTOR OF
COMMERCE AND INDUSTRY
NG
HONG KONG
ANNUAL DEPARTMENTAL REPORT
BY THE
DIRECTOR OF COMMERCE AND INDUSTRY
THE HONOURABLE
D. R. HOLMES, C.B.E., M.C., E.D.
FOR THE
FINANCIAL YEAR 1964-65
PRINTED AND PUBLISHED BY S. YOUNG, GovernMENT PRINTER
AT THE Government Press, JAVA ROAD, HONG KONG
EXCHANGE RATES
When dollars are quoted in this Report, they are, unless otherwise stated, Hong Kong dollars. The official rate for conversion to pound sterling is HK$16=£1 (HK$1=1s. 3d.). The official rate for conversion to U.S. dollars is HK$5.714-US$1 (based on £1-US$2.80).
46698-12K-9/66
Chapter
CONTENTS
I. REVIEW OF THE YEAR 1964-65 .
II. OVERSEAS TRADE RELATIONS BRANCH
General .
•
International Institutions
Paragraphs
1 - 73
74 - 75
General Agreement on Tariffs and Trade
76 - 77
•
U.N. Economic Commission for Asia and the
Far East.
78 - 81
Individual Countries
Britain
82
84
Nigeria
85 - 86
Malaysia
87 - 88
Republic of South Africa
89 - 90
Spain.
91
Iraq
92
•
Ghana
Republic of Ireland
93
94
Trade Missions
East Africa
95
III. TEXTILES BRANCH
The G.A.T.T. Long Term Arrangement Regarding
International Trade in Cotton Textiles
Export of Cotton manufactures to Britain
Domestic Aspects
Export of Cotton Manufactures to the U.S.A.
Export of Cotton Manufactures to other Countries
Canada
Western Germany
·
Norway
Italy
·
Woollen Knitwear Exports
iii
96 - 98
99 - 101
102 104
105 - 108
109
110
111
•
112
•
113
•
Chapter
IV. CERTIFICATION OF ORIGIN BRANCH
General .
Standard Certificates of Origin
Commonwealth Preference Certificates
Paragraphs
114
116
117
Comprehensive Certificates of Origin
Miscellaneous Certificates
territories
Changes in Certification Requirements of various
Certification Co-ordination Committee.
Comprehensive Certificates of Origin Cotton Com-
mittee
Publications
•
Statistics and Surveys
Visits
Revenue
118 120
―
121 125
―
126 - 128
129 - 132
133 - 135
136
137
·
138
-
139
•
140
141
•
142
.
V. INDUSTRY INSPECTION BRANCH
General.
Inspections
Kowloon Inspection Control. Investigations
Prosecutions .
VI. INDUSTRIAL DEVELOPMENT BRANCH
143 145
146
—
―
147
148 - 149
150 - 152
153 154
Review of Industry
Textile Spinning.
Textile Weaving .
Textile Finishing
Cotton Knitting.
Woollen Knitting
Wearing Apparel
Plastics
Light Metal Products .
Electronics.
Machinery.
Shipbuilding
Shipbreaking and Steel Rolling Mills .
iv
155 - 156
•
157 158
159
160
•
161
162
·
163 - 166
167 - 170
171 – 172
173
174 175
176 - 178
Chapter
VI. INDUSTRIAL DEVELOPMENT BRANCH-Contd.
Land for Industry .
Kwun Tong
Tsuen Wan and District
Other Areas
Paragraphs
179
·
180
181
182
Industrial Co-operation.
183 - 184
Water Supplies for Industry
185 - 187
D
Productivity.
188 - 192
193 - 195
Asian Productivity Organization
Miscellaneous
U.N. Economic Commission for Asia and the
Far East.
Dangerous Toys
Assistance to the Immigration Department
VII. TRADE DEVELOPMENT BRANCH
Overseas Activities
Milan International Samples Fair
196
•
197 - 202
203
204 - 207
Seventh United States World Trade Fair, San
Francisco
Planning and Preliminary Work for Future
Overseas Activities.
Local Trade Exhibitions
Display Centre of Hong Kong Products
Inauguration of the Chinese Manufacturers'
Association-Display Centre.
Overseas Trade Missions, Exhibitions, etc.
Japanese Industrial Exhibition
South African Exhibition
•
·
Historical Exhibition of Swiss Watches
Floating Exhibition of Australian Products
Floating Exhibition from Sweden
Trade Missions and Delegations Trade Complaints .
·
208 - 213
-
214 217
218 - 222
•
223
225
226
•
227
•
228
229
230 - 235
236 239
-
V
Chapter
VII. TRADE DEVELOPMENT BRANCH-Contd.
Trade Enquiries
Commercial Public Relations Co-ordinating
Committee
Working Committee on Export Promotion
Organization
Export Credits Insurance
VIII. TRADE PUBLICATIONS BRANCH
Trade Bulletin
Commerce, Industry and Finance Directory
Other Publications
•
Paragraphs
240 241
-
242 - 245
246 - 248
249 254
-
255 - 257
258
IX. OVERSEAS OFFICES
The London Office
General and Office Accommodation
Trade Relations.
Trade and Industrial Promotion and Public
259 - 260
261 265
―
Relations
Exhibitions
Public Relations
•
Visitors
The Sydney Office
General
•
Trade Enquiries, Commercial Introductions, etc.
Publications and Public Relations
Staff and General
X. TRADE LICENSING AND SUPPLIES BRANCH
Trade Licensing
Supplies
Rice
·
Frozen Meat
Accounts of Government Stocks
vi
266 - 272
273
274 - 284
285
286 - 288
289 - 290
291
292
293 - 295
296 - 300
301
302 - 305
306 - 307
308
Chapter
XI. DUTIABLE COMMODITIES BRANCH
Revenue from Excise Duties.
Tobacco
·
Hydrocarbon oils
Liquor
Table Waters
Revenue from Licences
XII. PREVENTIVE SERVICE
General
Organization
Training
Staff and Discipline
Searches
Narcotics
•
•
Merchandise Marks Ordinance
Bullion.
Emergency (Agricultural Poisons) Regulations
Court Actions
XIII. STATISTICS BRANCH
General .
Paragraphs
309 - 310
311
312
313
•
314
.* 315
316 - 318
319
320 - 326
327 - 329
330 - 334
335 - 340
341
342 343
―
344
345
346 - 349
Trade Statistics
Classification
Trade Declarations
Parcel Post Statistics
Retail Price Index.
Consumer Price Index
•
•
350
351 - 355
356 - 358
359 - 360
•
•
•
361
364.
Household expenditure survey
The Index
.
*
Cost of Living Survey, 1958 – 1963-64
Industrial Production Statistics
Research
National Income Survey
Data Processing Section
•
•
*
365 367
368 - 369
370 371
372
374
―
-
-
374
375 377
vii
Chapter
XIV. ADMINISTRATION AND ACCOUNTS BRANCH
General .
Organization and Personnel
Departmental Organization
Establishment
Recruitment
+
Paragraphs
378
379
•
-
380 382
•
383 - 387
388 391
Training
392 394
•
Appointments and Senior Staff Movements
395 - 409
410 412
413
•
•
Office Accommodation .
Welfare.
Departmental Quarters
Welfare Fund
Leave.
Revenue Inspectors' Mess
Clerical Canteen
Sports/Social Club
Accounts and Stores
Revenue
Forfeitures.
Expenditure
Stores
viii
•
414 416
417 419
―
420 - 422
423
+
•
424
•
·
425
426
427
428
429
432
•
LIST OF TABLES
Table
1.
Organization Chart of the Commerce and Industry Department,
as at 31st March, 1965.
2A. Exports of cotton textiles restrained under G.A.T.T. Cotton
Textiles Arrangements from October 1961 to September 1964.
2B.
3.
4.
5.
6.
7.
8.
9.
10.
Exports of restrained cotton textiles to the United Kingdom
from 1962 to 1964.
Certification of origin statistics, 1962-63 – 1964-65.
Trade complaints from overseas companies or individuals,
1964-1965.
Net revenue collected from all sources, 1963-64 and 1964–65.
Duty from dutiable commodities (gross), 1962-63 – 1964-65.
Revenue from dutiable commodities licences, 1964-1965.
Confiscations under the Dutiable Commodities Ordinance (No. 26 of 1963) and Dangerous Drugs Ordinance, Chapter 134, 1963-64 and 1964-65.
Major confiscations under other legislation, 1964–1965.
Distribution of approval establishment, as at 31st March, 1964
and at 31st March, 1965.
ix
:
*
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•
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I. REVIEW OF THE YEAR
GENERAL
In retrospect, 1964 was probably the best trading year for Hong Kong of any since the second world war. The broad patterns of this trade are recorded in the 'Overseas Trade Review for 1964' published in September 1965 in replacement of the review of Hong Kong's trade which has for many years occupied the first chapter in the Director of Commerce and Industry's annual report. It is therefore sufficient to mention here only that the value of Hong Kong's total trade increased by 15.6%; its imports by 15.4 (11.3)%; its domestic exports and re- exports by 15.6 (15.5)% and 16.9 (8.4)% respectively (the previous year's figures are shown in parenthesis).
2. These increases, in themselves remarkable, tell only half the story. As far as one can judge, the terms of trade took a favourable turn. Hong Kong's statistical apparatus is not sufficiently developed to measure such changes with any precision, but a number of economic indicators give reason to suppose that the economy was even more buoyant than the trade figures indicated and that in consequence of this success there was a substantial improvement in the real standard of living of the people of Hong Kong.
3. In the paragraphs which follow, a good deal is said about the department's efforts to keep open the channels of trade and to remove obstacles or at least to alleviate their adverse effect upon trade. Such an account necessarily gives prominence to the trade barriers that exist. These restrictions should however be judged against the background of their relatively narrow incidence. Many of them hamper improvement rather than inhibit it completely. The substantial increase in the value of trade reflects the many successes of manufacturers and merchants in developing trade where it is not restricted and in making the best of a difficult situation in those areas where restrictions exist.
4. The department is of course engaged in or concerned with many other activities; these can be summarized broadly under the headings of export promotion, industrial development, and miscellaneous matters such as the collection of revenue from dutiable commodities, the prep- aration of economic statistics, licensing and certification duties and
1
preventive work including prevention of the smuggling of narcotic drugs. Finally there is the administration of the department itself. These various groups of activities are covered in some detail in subsequent chapters which deal with the various branches of the department. In this review I have singled out some of the more important matters, many of them affecting a number of branches, and have commented on some of the more important issues.
5. Throughout the year under review there was the fullest con- sultation with unofficial advisers on all important matters. In particular, significant issues in the field of overseas trade relations were always referred either to the Cotton Advisory Board in the case of the cotton textile trade or to the Trade and Industry Advisory Board in other cases. So far as can be recalled no major decision was taken in either field without the unanimous concurrence of these very experienced advisory bodies. Their help and advice were invaluable, and without them the department would in many cases have been working in the dark.
EXTERNAL EVENTS OF MAJOR SIGNIFICANCE
The United Kingdom Surcharge
6. The dominating event in the external commercial policy field was the 15% import surcharge imposed in October by Britain as the main short-term measure to relieve the imbalance in the British payments position. This affected virtually all Hong Kong's exports to the United Kingdom, and the reaction in Hong Kong was one of universal dismay. There was much uncertainty and confusion to begin with; reduction of profit margins rapidly became evident; and by March 1965 it was clear that there would be a marked fall in Hong Kong's trade with Britain. In the first quarter of 1965, the value of exports already showed a reduction of 14%. I visited London in December 1964 in connexion with the future of the Cotton Textile Agreement with the United Kingdom, and had the opportunity of discussing the effect of the surcharge with the President of the Board of Trade.
The United Kingdom Cotton Textile Agreement 1963–65
7. The visit mentioned above stemmed from informal discussions with four members of the British Cotton Board, including Mr. T. D. F. POWELL, its Director General, who had visited Hong Kong in September 1964 as guests of the Government. They met many prominent textile industrialists and were made aware of the importance that Hong Kong
2
attached to reaching agreement about the future of cotton textile exports to Britain after the expiry, at the end of 1965, of the existing three-year agreement.
8. The agreement provided for allocation of a supplementary quota if it could be shown by use of a complex formula that Hong Kong India and Pakistan also had lost to third countries the proportion of British imports which they had established in 1958. The formula had in the event proved unworkable. After consultation with the Cotton Advisory Board, two officers from the department visited London in July 1964, and worked out with the Board of Trade a once-for-all supplementary quota, amount- ing to 14.5 million sq. yds. to be spread over the remainder of 1964 and 1965. This supplementary quota was the equivalent of a growth factor of about 4% spread over two years.
9. The out-turn of cotton textiles exported to Britain during 1964 amounted to only 87% of that year's quota. Out of a possible 189 million sq. yds., 163.5 million sq. yds. were shipped, leaving a carry-over of 25.5 million sq. yds. to be shipped within the first six months of 1965. By contrast in 1963 98% of the total yardage had been shipped during the calendar year, leaving only an insignificant amount to be carried over into 1964.
The G.A.T.T. Long-term Cotton Textile Arrangement—U.S.A.
10. The second year of the Long-term Cotton Textile Arrangement ended on 30th September, 1964. I represented the Government at the formal review of the operation of the Arrangement held in Geneva at the end of 1964. As at the meeting in 1963, the majority of exporting participating countries, low-cost producers in the main, complained about the restrictive manner with which the arrangement had been operated by importing countries. A number of them made it clear that they would not be willing to see an extension of the present Arrangement beyond its present expiry date in 1967 unless those importing countries which had in their view used it improperly in order to protect their domestic industries, should pursue a less restrictionist policy in the future. The United States had by now negotiated restrictive arrangements with many of even the most minor suppliers and American policy once again came under attack. Other developed countries which had made little or no attempt to remove or modify long-standing restrictions were also subjected to criticism. But no concrete results were produced at this meeting of the International Cotton Textiles Committee.
3
11. Within the framework of the Long-term Arrangement discussions took place, during the year under review, with the Governments of the United States, Canada, the Federal Republic of Germany, and Italy. These were concerned partly with the promulgation for a further period of restrictions already in being, and partly with requests for the imposition of new restrictions. Details are given in Chapter III.
12. The extent of the cotton textile restraints operated by Hong Kong since October 1961, when the first G.A.T.T. Arrangement came into force, is shown in tabular form at Table 2A. The restraint levels in force under these G.A.T.T. arrangements for the year 1st October, 1964 - 30th September, 1965 are as follows:
U.S.A.
Canada
...
274.7 million sq. yds.
21.3 million sq. yds.
...
...
19.7 million sq. yds.
2.4 million sq. yds.
Federal Republic of Germany
Norway
Italy
Federal Republic of Germany-Woollen Knitwear
4.7 million sq. yds.
13. After consultations with the Trade and Industry Advisory Board and discussions with officials of the Federal Republic of Germany, the department inaugurated an export authorization system in respect of the export of certain woollen garments to West Germany. The garments affected were for the most part women's sweaters and cardigans. The German authorities were concerned about the rapid expansion of this trade, and the purpose of the authorization system was to keep a forward watch upon its development. The trade increased considerably during 1964, and the authorization system was continued into 1965.
Miscellaneous Restrictions
14. Developments in the commercial policies of several other terri- tories continued to be a matter of concern or interest to the department. Nigeria, for instance, during the year embarked upon a discriminatory licensing system for the restriction of imports. An officer was sent by the department to Lagos in August 1964 in order to bring to the notice of the Nigerian authorities Hong Kong's concern about this development.
15. Trade with Spain, which in other respects seemed to show promise, had for some time been hampered by obstacles largely of a procedural nature. Representations made during the year through the British Embassy in Madrid seemed to be effective in removing these obstacles.
4
International Economic Institutions
16. A slightly easier staff position enabled the department to pay somewhat closer attention to the work of the main international economic institutions. An officer of the department attended the 22nd Plenary Session of the Contracting Parties to the General Agreement on Tariffs and Trade at Geneva in March 1965 and it was also possible to send an observer to the United Nations Conference on Trade and Development which was held in Geneva during the early summer of 1964.
17. Hong Kong was represented at sessions of E.C.A.F.E. Committees held in Bangkok during January and February 1965. The delegations comprised both officials of the department and unofficial members of the Trade and Industry Advisory Board.
EXPORT PROMOTION
Trade Fairs
18. In 1963, the Trade and Industry Advisory Board recommended that trade promotion activities undertaken by the department in the year ahead should be principally concentrated in Europe and the west coast of North America.
19. Members were of opinion that there should be adequate follow- up to the major promotional projects carried out in Europe during the preceding year, namely the trade mission to the Common Market countries and participation in trade fairs at Frankfurt and Berlin. These ventures, measured by subsequent increase in the value of exports, had proved highly successful and had contributed usefully to developing Hong Kong's trade with the Common Market following the breakdown of negotiations for Britain's entry. In this context it was decided that Hong Kong should participate officially in the Milan International Samples Fair from 12th to 25th April, 1965.
20. The recommendation to devote resources to promotion in the United States was made because the department had carried out no promotional activities there since the Seattle Trade Fair in 1960. The Board believed that a resumption of promotion work in the United States would prove well worthwhile in many fields other than that of textiles, for which the market demand was already so strong that widespread restrictions had had to be introduced. It was accordingly decided that there should be official participation in the 7th United States World Trade Fair to be held in San Francisco from 10th to 20th September, 1964.
5
21. The Hong Kong exhibit at Milan was an outstanding public relations success, but its commercial benefits were not so readily apparent, in spite of a very large number of trade enquiries. It was an expensive fair; the cost was $363,000. San Francisco seems to have been an unqual- ified commercial success at the much lower cost of $234,000. For this fair we introduced the novel feature of commercial participation under the aegis of the Hong Kong General Chamber of Commerce and the Chinese Manufacturers' Association; there was also a prestige exhibit organized by the department. The success achieved at San Francisco was due in large part to the detailed planning carried out beforehand by a sub-committee of the Trade and Industry Advisory Board, to the hard work and enthusiasm of the businessmen who attended the fair, and to the very close co-operation which was achieved and maintained between the department, the main commercial and industrial associations, and the business community at large.
Trade Promotion Publications
22. For many years now, the department has been responsible for two major trade promotion publications, namely the monthly 'Trade Bulletin', first published as a broadsheet in 1952, and the annual ‘Com- merce, Industry and Finance Directory', which was first published in 1955. Both feature good colour photographs, and both attract extensive advertising on a quasi-commercial basis. Their production is the major task of the Trade Publications Branch of the department. The circulation of the Trade Bulletin was in the region of 20,000 copies monthly in March 1965; most of the copies go overseas. A continuing problem during the year was pressure on available advertising space and the need to keep down weight while preserving the quality of the paper. After consultation with the Trade and Industry Advisory Board, advertising rates were increased at the end of the year.
Overseas Offices
23. The department maintains two offices overseas, one in London and one in Sydney. The latter, established in 1960, is primarily concerned with export promotion; the London Office, which was established shortly after the end of the war, combines export promotion duties, an information centre for Hong Kong in Britain, a departmental link with the Board of Trade and the Colonial Office, and certain other extra- departmental services.
6
24. During the year, the Director of the London Office was much preoccupied with plans for extending export promotion and information services in more spacious adjacent premises in Pall Mall recently acquired for this purpose. By the end of the year work had started on the im- plementation of these plans.
25. The Sydney Office continued its routine functions, somewhat handicapped by the inability of the department to provide an assistant to the Trade Representative in charge until February 1965, when an appointment was made at some sacrifice to efficiency in Hong Kong.
26. At the end of the year under review the recurrent cost of the London Office was running at about $770,000 a year, whilst that of the Sydney Office was about $170,000 a year.
Overseas Business Enquiries
27. During the year the method of handling overseas business enquiries was reviewed, not for the first time. The basic dilemma is that whilst enquirers ought to be given the sort of answer that will help them to conclude business, at the same time it is difficult to justify discrimination between potential suppliers of similar goods. If the second point be pressed too far the enquirer is apt to receive lists of potential suppliers so lengthy as to irritate rather than assist him, since he has no means of picking out those likely to suit his own individual needs. In this latest review, which was carried out in consultation with the Trade and Industry Advisory Board, a new system was evolved, whereby routine enquiries were circulated in batches by rotation to the Exchange Banks Association, the Hong Kong General Chamber of Commerce, the Federation of Hong Kong Industries, and the Chinese Manufac- turers' Association. The system was introduced in March for an experi- mental period of six months.
Display Centres
28. On 10th August, 1964 I had the pleasure of opening the Display Centre of the Chinese Manufacturers' Association on the eleventh floor of the Association's premises. It complements the department's own display in the City Hall, differing in purpose to the extent that the Association's Centre is designed to advertise the products of member firms. The department's Display Centre at the City Hall attracted in- creasing numbers of overseas business visitors, and continued to fulfil its function satisfactorily. I am indebted to the Urban Council for per- mitting the Centre to remain in its temporary home at the City Hall
7
for a number of months after the date when it should have moved to alternative premises.
Commercial Public Relations Co-ordinating Committee
29. The department is not the only agency operating an export promotion and public relations service with public funds. Since 1962, the Public Relations Joint Committee of the Hong Kong General Chamber of Commerce and the Federation of Hong Kong Industries has been in receipt of a subvention for the purpose of carrying out work in the field of commercial public relations. Co-ordination between the work of the department, the Joint Committee and the Government Information Services is effected by the Commercial Public Relations Co-ordinating Committee of which I am chairman.
30. The Committee met regularly once a month during the year, and in September 1964, in accordance with its terms of reference, sub- mitted a report to the Colonial Secretary. The report noted certain shortcomings in the existing arrangements and, under the stimulus of new proposals put forward by Mr. H. D. M. BARTON, the Joint Committee's resident representative in Europe, recommended that a Committee be appointed to review the organizational structure for trade promotion. In the Legislative Council on 25th March, I announced the Governor's appointment of the new Committee, of which I was also to be the Chairman,
31. During the year the Public Relations Joint Committee continued to employ consultants in Britain and Europe, mounted a floating exhibi- tion on the m.v. Ceylon which toured European ports, and appointed Mr. K. T. Woo to be its resident representative in New York city. Mr. Woo was attached to the department for about a month before he went to New York. The Public Relations Joint Committee also sponsored the visits to Hong Kong of a number of distinguished personalities and organized entertainment for a great many more.
Export Credit Insurance
32. Mr. R. A. FREEMAN of the United Kingdom Export Credit Guarantee Department spent two months with the department in October and November, and completed a report on the shape which the Hong Kong organization for export credit insurance might take and the senior staff and funds needed to bring it into being. Mr. FREEMAN's proposal that a statutory corporation be set up was accepted in principle by the Government, and work started immediately under the direction of a small steering committee of the Trade and Industry Advisory Board,
8
chaired by the Deputy Director, to give effect to this proposal. It seemed possible that a statutory corporation might be in business by the summer of 1966. I was greatly indebted to Mr. FREEMAN for his assistance, and to the Board of Trade for releasing him to visit Hong Kong.
Certification of Origin
33. Certification of Origin is a major task of the department. It is still regarded by some merchants and manufacturers in Hong Kong as a necessary but vexatious form of control. In fact, however, the cer- tification system amounts, in Hong Kong's circumstances, to a form of export promotion-perhaps the most valuable of all forms of export promotion, although necessarily operated as a control and also to an important element in Hong Kong's commercial policy. For instance, without the very considerable origin controls operated by the department, the preferences granted to Hong Kong goods by Britain and certain other Commonwealth countries would be valueless; a large part of Hong Kong's trade with the United States would be frustrated; and many other countries would refuse entry to Hong Kong manufactured or processed goods. Whereas many countries are in general disposed to accept unofficial certificates-indeed in most countries, these are the only certificates available to verify domestic origin,-in Hong Kong's peculiar circumstances, they are reluctant to do so. The department for several years now has been at pains to press such countries to accept unofficial certificates with some success since it has been possible to point out our close collaboration with several unofficial bodies—but the fact is that many countries remain suspicious. Without the department's certification system, built up laboriously over the years and widespread recognition of its general integrity in the face of many problems deriving from Hong Kong's own tariff-free status and its proximity to China, many countries could plausibly exclude the products of Hong Kong's industry. About two-thirds of Hong Kong's exports are accompanied by the department's certificates of origin. Investigations during 1965 have established that the stamp fees charged for certificates of origin at present closely match the cost of the certification system. In 1964–65, stamp fees paid amounted to $4.7 million, approximatley 0.01% of the value of trade covered by certificates; from this it may be seen that the service is not expensive.
34. The department issues three main types of origin certificates: (a) Standard certificates of domestic origin, by and large issued only when goods claiming Hong Kong origin are manufactured
9
in Hong Kong in accordance with internationally accepted standards for determining origin.
(b) Commonwealth preference certificates of origin, the criteria for issue of which are established by the territories to which the goods are exported.
(c) Comprehensive certificates of origin which, by agreement with the United States Government, verify that certain goods exported from Hong Kong do not contravene the provisions of the U.S. Foreign Assets Control legislation.
35. The salient developments in certification during the year were: (a) An increase of 2.2% in the number of standard certificates issued, together with an increase of 18.7% in the value of goods certified. The trend in recent years towards larger individual consignments covered by such certificates continues.
(b) An increase of 1.0% in the number of Commonwealth preference certificates issued for the United Kingdom, together with a 3.4% increase in value of consignments covered. Since 1962, there has been a significant downturn in the rate of increase in the number of certificates issued and in the value of the goods certified; to this tendency was added, towards the end of the year, the effect of the United Kingdom surcharge.
(c) A 2.9% increase in the number of Commonwealth preference certificates issued for goods exported to territories other than Britain. This reversed a downward trend which had been apparent until about the end of 1963.
(d) The number of commercial comprehensive certificates issued for goods exported to the United States increased once again, by 17.7%. The indications are that the value of consignments covered by these certificates is also increasing.
In terms of the value of goods certified, about 40% are exported under standard certificates, 38% under preference certificates, and 22% under comprehensive certificates.
36. Almost two-thirds of all goods exported to territories which grant preferential tariff rates to Hong Kong were exported under pref- erence; to Britain almost all claimed preference, to other territories rather less than half. Somewhat less than half the value of exports to the United States and its dependencies were exported under comprehensive certificates.
10
37.
In 1964-65, shipments under preference to Britain represented 80% of all preference shipments; in the previous year they had repre- sented about 91%.
Industry
INDUSTRIAL DEVELOPMENT
38. The year saw significant expansion in most sectors, both in quantity and in quality or standards. Perhaps the most dramatic develop- ments were in the electronics industry. The increased earnings of the textile industry, over 60% of whose exports are under one form of control or other, indicate that a beneficial side product of otherwise unwelcome restrictive measures is the opportunity to accelerate the process of 'trading up' i.e. producing better quality goods and thus gaining a higher return from a fixed volume of trade.
39. The shipbreaking and steel rolling industries suffered a year of depression and the enamelware industry continued its slow decline.
40. In the absence of production statistics, the most reliable indicators of industrial expansion are the figures of domestic exports. At 15% higher by value than in 1964, it can be assumed that the rate of expansion continued to be satisfactory.
Productivity
41. The Industrial Development Branch was bedevilled by the illness of its senior officers during the latter part of 1964 and the first quarter of 1965, and its normal activities were seriously curtailed not only on this account, but also because of its preoccupation with the problem of ‘hazardous toys', referred to below. Nevertheless it was possible to give support to the Working Committee on Productivity whose report was completed in July and led to the appointment of a 21-member Provisional Productivity Council in March 1965. This was the culmination of almost two years of unremitting work in which the Industrial Develop- ment Branch had played an important part.
42. The Branch also was active in servicing the Asian Productivity Organization of which Hong Kong became a full member at the fifth Session of the Governing Body in Tokyo from 15th-19th December, 1964. I attended this session as the Director for Hong Kong, together with Dr. S. Y. CHUNG, Alternate Director, and Mr. K. S. HUIE, Senior Trade Officer. Dr. CHUNG's assistance has been invaluable in the field of productivity and I am glad to acknowledge the Government's indeb- tedness to him in this respect.
11
43. I take this opportunity of acknowledging also the valuable collaboration of Mrs. Susan YUEN, Secretary-General of the Federation of Hong Kong Industries and Secretary of the Hong Kong Management Association. During the year this Association organized two seminars held in Hong Kong under the aegis of the Asian Productivity Organiza- tion, thus enabling the Colony to play a significant part in the affairs of the A.P.O. before Hong Kong's own productivity organization had been formally brought into being. One of the seminars was opened by His Excellency the Governor.
Chinese Manufacturers' Association Exhibition
44. The 22nd Exhibition of Hong Kong Products, organized by the Chinese Manufacturers' Association, was opened by the Governor on 7th December, 1964, and remained open until 18th January, 1965. The exhibition occupied a site of 420,000 sq. ft. on the Hung Hom reclamation, nearly 100,000 sq. ft. larger than the previous exhibition. Samples supplied by over 600 manufacturers representing at least 40 industries were dis- played. There were no significant innovations. The Industrial Development Branch, as usual helped the Association with its arrangements. The department's silver cup for the best stand display was awarded to Crocodile Garments Ltd.
MISCELLANEOUS
Dutiable Commodities: Revenue out-turn
45. Net revenue from dutiable commodities registered an all round increase, reflecting the continued high level of general economic activity, population growth, and improved living standards.
Tobacco... Hydrocarbon Oils
1964-65
$ 101,184,000
1963-64
$
Percentage Change
93,314,000 + 8%
...
Liquor
...
...
75,816,000 71,843,000
65,227,000 +16%
61,506,000 + 17%
Table Waters
...
6,328,000
255,171,000
5,414,000
225,461,000
+ 17%
+ 13%
Revenue from dutiable commodities amounts to about one-sixth of
total general revenue.
46. Net revenue from tobacco increased by 8.4% to a little over $100 million, reflecting a sustained increase in domestic consumption.
12
The increase in revenue was greater than the increase in the quantity of tobacco imported, which points to expanded imports from non-preference -i.e. non-Commonwealth-sources.
47. The rate of increase in the consumption of whisky, brandy and beer was maintained, and there was some acceleration in the rate of increase in the consumption of gin. An increase in the importation of wines was largely attributable to expanded imports from Commonwealth sources, particularly Australia. Imported Chinese-type liquor continued to make inroads into Hong Kong's domestic market.
48. Seizures by the Preventive Service showed some falling off; this was particularly pronounced in Chinese prepared tobacco, profit- margins on which are believed to have been too small to absorb the cost of smuggling. Continued pressure to check abuses in the use of industrial diesel oil in road vehicles seems to have borne some fruit. Nearly twice the number of vehicles were inspected, as compared with the previous year, but the number of seizures was much the same.
Narcotics
49. Close liaison was maintained between the Preventive Service and the Police Narcotics Bureau in the drive against narcotic importers and traffickers. The Service made 252 separate seizures of narcotic drugs, the largest single one being 264 lbs. of raw opium.
Food Supplies-Rice
50. Rice remained the most important of the food supplies included among statutorily 'reserved commodities'. The rice import scheme continued to work satisfactorily, stocks were at all times ample and wholesale prices remained stable. Consumption per capita continued its gradual decline, reflecting ability to purchase a greater variety of food and a rising standard of living. A significantly greater proportion of rice consumed is the more expensive whole rice. Total imports amounted to 348,000 tons (377,000 in the previous year). Thailand supplied 56% (49%) and China 24% (24.5%). Offtakes totalled 363,000 tons, 4,000 tons less than in the previous year.
Consumer Price Index, etc.
51. The Statistics Branch completed its report on the Household Expenditure Survey 1963-64 and prepared a Consumer Price Index with September 1963 - August 1964 as the base year (=100). The weights
13
derived from the Household Expenditure Survey as compared with those adopted in 1947 for the Retail Price Index are indicated below:
Weight (R.P.I.) Adjusted
Foodstuffs (Rice) ...
...
...
..
Housing
Services
(Education)
Weight (C.P.I.) 1963-64
Existing
for strict comparison
...
48.3
50.00
54.8
(6.2) (15.55)
(17.0)
15.2
9.25
10.1
14.5
10.50
11.5
...
::
...
(7.2)
(3.50)
(3.8)
6.2
7.00
7.7
4.2
1.50
1.6
:
3.3
4.00
4.4
3.2
2.23
2.5
•
3.0
5.00
5.5
...
2.1
1.75
1.9
...
...
100.0
91.25
100.0
...
Clothing and footwear
Miscellaneous goods
...
Alcoholic drink and tobacco
Transport and vehicles
Fuel and light
Durable goods
The very substantial downdard change in the weighting for rice, from approximately 15.5% to 6% attracted little or no public comment, whereas the apparently insufficient increase in the weighting for housing, from approximately 10% to 15% predictably did. It is of interest to observe that the weight for education is approximately 7%.
52. Movements in the Consumer Price Index itself have not so far differed very greatly from those in the Retail Price Index, as the com- parison below discloses:
September 1964 October 1964
...
***
November 1964
December 1964
January 1965
February 1965
March
1965
R.P.I.
C.P.I.
(adjusted)
109
104
106
...
...
106
102
106
...
...
¦ ¦
99
102
99
...
101
100
102
101
102
...
...
Cost of Living 1958: 1963–64
53. The Statistics Branch also completed a comparison between the cost of living in 1963-64 with that of 1958 to assist the 1965 Salaries Commission in its deliberations. The weightings for 1958 used were those derived from the 1963-64 household expenditure survey. The overall rise in the cost of living is estimated at 14%, the percentage
14
increase or decrease for broad groups of commodities and services.
being as recorded below (weights in brackets):
Services ... Housing
•
Alcoholic drink and tobacco
Cothing and footwear
Foodstuffs
...
Miscellaneous goods
Transport and vehicles
Durable goods
...
•
...
...
...
+
...
+ 28.9 (14.5)
...
+ 17.2 (15.2)
+ 13.3 ( 3.3)
+
Fuel and light
+
...
+ 13.2 (6.2) + 11.4 (48.3)
+ 4.3 (4.2)
2.8 (3.2) + 2.4 (2.1)
I
6.7 (3.0)
100.0
54. The completion of the Household Expenditure Survey is a land- mark in the work of the Statistics Branch, being the first sustained scientific investigation undertaken into the expenditure patterns of the major part of Hong Kong's population. It is complementary to and in its way comparable with the population census of 1961. The essential administrative decisions for the survey and the resulting consumer price index were taken early in 1962 by the Cost of Living Committee (Chairman: Commissioner of Labour; members: Deputy Economic Secretary, Assistant Establishment Officer and the Statistician of the department), although the principal policy decision had been made in 1961. Experience will disclose mistakes; but the completed exercise is testimony to the tenacity and sustained effort of the Statistics Branch. The total cost spread over two years of the Household Expenditure Survey and of the cost of living comparison is estimated to have been $490,000. Funds have been authorized to enable a series of monthly household expenditure surveys to be undertaken to keep under review the commodity/service content and weighting pattern of the C.P.I., and to form the basis for their revision when necessary.
Industrial Production Statistics
55. Industrial production statistics have been collected quarterly since 1961 by the Industrial Development Branch, and a census of 1962 industrial production was attempted in 1963. By October 1964, the work had fallen seriously into arrears because of staffing difficulties, and a decision was taken to suspend collection of further statistics for the time being. Moreover analysis and interpretation of statistics already collected had been brought virtually to a standstill by reason of the need to direct Industrial Development Branch effort to the problem of
15
water supplies for industry during the drought of 1963 and 1964. Paradoxi- cally possession of the statistics already collected was an important factor in arranging equitable distribution of supplies to industry in accordance with its already ascertained needs. Suspension of work on industrial production statistics was a grave set-back to the departments' programme. The collection of these statistics is to be resumed as soon as practicable on a more systematic basis than before. The existing records have been stored for later reference and comparative analysis.
56. Meanwhile, simple output statistics for the spinning and weaving sectors of the textile industry have been maintained. Production of yarn and grey fabrics during 1964 was almost the same as in 1963.
Hazardous Toys
57. In June 1964, there occurred in the United Kingdom the first of a number of cases in which toys made in Hong Kong were alleged to be dangerous to health because of lead content in the paint. Depart- mental action consisted of seeking to establish the true facts (there was much exaggerated and inaccurate press publicity in England), and in advising and assisting local toy manufacturers to avoid the use of any material that could possibly be, or be alleged to be, dangerous to health. At the end of the year under review it was known that the United Kingdom Home Office was committed to the enactment of legislation on this subject, but it was not clear what form it would take. These developments caused considerable damage to Hong Kong's image as a supplier of consumer goods to the United Kingdom market, for it is impossible to set the record truly straight once the popular press has launched allegations such as these with sensational banner headlines on the front page.
Departmental Organization
ADMINISTRATION
58. The organization of the department as it existed theoretically in March 1965 is illustrated schematically in Table 1. I say theoretically, because this new organization, approved in the 1964-65 estimates, with a second Deputy Director and a fourth Assistant Director to deal with export promotion, was fully implemented during one month only, Septem- ber 1964, on return from leave of myself and Mr. D. M. SELLERS. The resignation of Mr. E. G. A. GRIMWOOD, O.B.E. from the directorship of the London Office in July after eighteen years' service was a grave loss. The absence of sufficient departmental or Administrative Grade resources to provide a replacement necessitated an attempt at direct
16
recruitment, which proved a failure. I was then constrained to post Mr. BARLOW, Deputy Director, to London in October to take over direc- tion of the office there. The directorate was therefore shorthanded for the greater part of the year.
59. Despite these and other staffing difficulties it was possible to introduce a number of organizational changes, important among which was the implementation of the Haddon-Cave Report proposals for changes in the command and organization of the Preventive Service.
60. For many years the relationship between the administrative, executive, and investigatory sections of the department in the complicated field of origin certification, shared between the Trade Officer cadre and the Preventive Service at operational level, had been less than satisfactory because operational responsibility was unified only at directorate level. During December 1964, a radical reorganization was tried as an ex- periment. The Industry Inspection section and elements of the Investiga- tion section of the Preventive Service, together with the Investigation Section and the Kowloon Inspection Control of the Certification Branch, were combined under the command of an Assistant Chief Preventive Officer responsible, so far as investigations and other operational matters were concerned, solely and directly to an Assistant Director. Preliminary results indicated that the reorganization was justified. They foreshadowed a non-uniformed Industry Inspection Branch staffed by non-transferable specialists with a sound knowledge of the problem of industrial and primary production and procedures for claiming origin for particular export markets. The proposal to create a new cadre on these lines had the support of the senior officers of the Preventive Service even though they appreciated that it would entail some reduction in the Service's promotion prospects.
61. The first steps were taken in 1965 to reorganize the Overseas Trade Relations Branch and the Industrial Development Branch of the Development Division in such a way as to provide, by the pooling of staff at the Assistant Trade Officer level, a common service section. known as the Economic Information Centre. The two branches still retain their separate identity but the Centre is intended to provide, firstly for the use of the branches themselves and secondly for the depart- ment as a whole, a common pool of properly classified data on the range, structure and capacity of Hong Kong industry and on the overseas factors which may affect its ability to export.
17
Establishment and Staffing
62. The authorized establishment of the department and its distribu- tion among sections, branches, and divisions is shown in tabular form in Table 10. The net increase of 78 posts compared with the previous year is largely concentrated in the Textiles and Certification Division, the Preventive Service, and the Statistics Branch.
63. The department experienced great difficulty in bringing the Trade Officer grade and related operational Executive Grade posts up to author- ized strength. One experienced Senior Trade Officer retired prematurely; one Trade Officer on the pensionable establishment and one recently recruited on agreement resigned; one Trade Officer was recruited overseas on agreement. The middle register of the establishment was left weak in experience, accentuated by the very short service of the majority of Assistant Trade Officers, despite some reinforcement from within Government itself. At the beginning of the year there were 17 vacancies in an establishment of 45 posts; at the end of the year vacancies had been reduced to nine. But there were also six vacant Executive Grade posts in a total establishment of 14, and furthermore new and formidable commitments could be foreseen, for both Trade Officers and Executive Officers, in respect of new proposals which had been accepted in principle by Government. A 25% shortage on the combined establishment, coupled with lack of experience among many officers, placed a considerable strain on all officers, and severely hampered the essential work of the department.
64. Mr. J. H. MARTIN was engaged on agreement to fill the new post of Commercial Counsellor (Hong Kong Affairs) to be attached to the British Embassy in Brussels. Mr. MARTIN spent two months in Hong Kong on familiarization prior to taking up his duties in April.
65. Mr. J. D. MCGREGOR, Senior Trade Officer, was promoted to the substantive post of Assistant Director with effect from 1st April, 1964. He was the first member of the Trade Officer cadre to be promoted to superscale rank.
66. Mr. T. D. SORBY, Deputy Director, acted as Director during the period of overseas leave which I took from 7th May to 1st August, 1964, and again for the greater part of a month towards the end of 1964 when I visited London, Geneva, and Tokyo.
Office Accommodation
67. The organizational and staffing difficulties referred to earlier were compounded by the inadequacy of the accommodation in the Fire
18
Brigade Building. This had entailed in the previous year the thoroughly unsatisfactory expedient of accommodating the Overseas Trade Relations and Industrial Development Branches in uncomfortable, unsuitable and excessively compartmented offices on the 12th floor of Li Po Chun Chambers. In the year under review it was necessary to rent two floors of the new Chinese Manufacturers' Association Building for the Export Promotion Division. The net effect is that what ought to be a compact organization has been (and at the time of writing still is) awkwardly and inefficiently spread over four buildings along a quarter of a mile of Con- naught Road.
68. At the end of the year, there was some prospect that the position might be improved, as the shortage of commercial office accommodation in the central district eased. The department was much indebted to the Secretary for Chinese Affairs who expressed his willingness to transfer to a neighbouring new building, at considerable inconvenience to his own organization, so that essential administrative branches of the Com- merce and Industry Department might be concentrated in the Fire Brigade Building.
69. As regards the department's Kowloon accommodation, it proved possible towards the end of the year to acquire temporary premises on the top floor of the Housing Authority's new headquarters in Hung Hom; from this central location the Industry Inspection Branch (an essential adjunct to certification procedures) would be able to operate more efficiently than from the premises they had hitherto occupied in Kwun Tong.
Welfare
70. A block of 90 married quarters at Hung Hom for Preventive Service officers of Sub-Inspector rank and above was opened by the Deputy Director at a small ceremony in June. This was a major step forward in the welfare of the Service. The decision to proceed with 121 married rank and file quarters at North Point for completion in 1966 was also most encouraging.
Trade and Industry Advisory Board
are:
71. The terms of reference of the Trade and Industry Advisory Board "To advise the Director of Commerce and Industry on all matters, other than labour matters, which affect the Colony's trade and industry'. In accordance with these very broad terms the Board's advice was sought during the year on a wide variety of subjects. Apart from these advisory
19
functions members of the Board also played a prominent part in the Colony's trade promotion activities and headed delegations to committees of the E.C.A.F.E. I welcome this opportunity of acknowledging, on behalf of the department and of the Government, the very valuable contribution made by the Board.
Cotton Advisory Board
72. A similar tribute is due to the members of the Cotton Advisory Board. Whilst it operates in a somewhat narrower field than the Trade and Industry Advisory Board, the Cotton Advisory Board is concerned with more than half the Colony's export trade and is moreover liable to be suddenly confronted, sometimes in dramatic circumstances, with urgent and difficult and important problems related to the maintenance of our channels of trade in cotton textiles. Like the Trade and Industry Advisory Board, the Cotton Advisory Board's members are all unofficials except for the chairman, who is the Director of Commerce and Industry ex officio. Matters dealt with during the year included important dis- cussions with the United Kingdom Board of Trade and also, under the provisions of the Long-term Cotton Textile Arrangement of the G.A.T.T., negotiations with the American, Canadian and Italian Governments.
Conclusion
73. The year was characterized for the department by constant and heavy pressure of events upon a staff barely sufficient in numbers or experience for the normal run of public business and certainly inadequate to deal with the crises which seem to come upon us so regularly. I would like to express my appreciation of the way in which the officers of the department rose to the challenge of these adverse circumstances. They gave most loyal service to the department, to the Government and to the public, and for this I am most grateful.
II. OVERSEAS TRADE RELATIONS BRANCH
GENERAL
74. The Overseas Trade Relations Branch is being developed, as staffing resources permit, to be a repository of information on the commer- cial policies of overseas countries, territorial groupings, international institutions, etc. and to provide authoritative advice to the Director, to Government, and to domestic agencies and businessmen on these matters. A secondary purpose is to train staff to give support in discussions and
20
negotiations with overseas governments, on trade missions, etc. Signi- ficant progress was made during the year, despite staff shortages and in- convenient accommodation.
75. It was possible to inaugurate a specialist reference library, separate from the department's general and trade reference library. Moreover, the branch was able to prepare material for a trade mission to East Africa, to support delegations to E.C.A.F.E. committees, to prepare a number of basic information papers for the Trade and Industry Advisory Board, and to pinpoint to trade associations changes in overseas tariffs, etc. which were of significance to Hong Kong. It was also possible substantially to improve liaison with British delegations abroad partic- ularly the British Embassy in Washington and to undertake research in greater depth. The more important particular projects or problems with which the Branch was concerned are covered in subsequent paragraphs.
INTERNATIONAL INSTITUTIONS
General Agreement on Tariffs and Trade
76. Hong Kong was represented by an Assistant Director of the department attached as an observer to the British Delegation at the 22nd Plenary Session of the G.A.T.T., held in Geneva from 2nd to 25th March, 1965. This was the first session of the G.A.T.T. to be held after the formal establishment of the United Nations Conference on Trade and Development as a permanent organ of the General Assembly of the United Nations. It was also the first session of the G.A.T.T. to be held after the presentation to the Contracting Parties of the proposed new Chapter IV of the General Agreement itself. This chapter, designed to extend and modify the General Agreement in a way which will take due cognizance of the special needs of the developing countries, is of consider- able interest to Hong Kong.
77. Additional interest surrounded this session of the G.A.T.T. because it coincided with a mid-way stage in the Kennedy Round of tariff negotiations and took place only a few months in advance of the major review of the Long Term Arrangement on Cotton Textiles due to be held in Geneva at the end of 1965. Of particular interest to Hong Kong was the preliminary work done and the work programme agreed upon for the new Committee on Trade and Development set up by the Contracting Parties with the object of keeping under review, the implementation of the new Chapter IV of the G.A.T.T. As this Committee was only estab- lished in February 1965, it had little to report in the way of concrete results, but its programme of work during ensuing months was scheduled
21
to encompass such subjects as tariff preferences for developing countries, and enhanced access for their agricultural products, manufactures and semi-manufactures to the markets of the developed countries.
U.N. Economic Commission for Asia and the Far East
78. Mr. Daniel LAM, J.P., a member of the Trade and Industry Advisory Board, headed the Hong Kong delegation to the Seventh Series of the Intra-Regional Trade Promotion Talks and the Eighth Session of the Committee on Trade, held in Bangkok from 14th to 22nd January and from 25th January to 2nd February, 1965 respectively. He was accompanied by two officers of the department in the capacity of alternate delegate and secretary respectively.
79. Mr. T. K. ANN, also a member of the Trade and Industry Advisory Board, represented Hong Kong at the 17th Session of the Committee on Industry and Natural Resources, which followed the Committee on Trade. Mr. ANN was also assisted by two officers of the department.
80. Hong Kong was represented at the 21st Plenary Session of the E.C.A.F.E., held at Wellington, New Zealand from 16th to 29th March, 1965. The Hon. Y. K. Kan, O.B.E., J.P. headed the delegation with two officers from the Economic Branch of the Colonial Secretariat. Briefs for the Hong Kong delegation were prepared by the Branch.
81. It became clear from the deliberations at these meetings that the E.C.A.F.E. has taken on a new significance in view of its developing relationship—and the relationship of other regional commissions—with the United Nations Conference on Trade and Development and its subsidiary organ, the Trade and Development Board. The relationship between the regional commissions and the U.N.C.T.A.D. will be two- fold. First, they will identify problems and submit them to the world body in the form of suggested agenda items for its consideration and secondly, they will, where appropriate, be responsible for implementing the recommendations and decisions of the U.N.C.T.A.D. itself.
INDIVIDUAL COUNTRIES
82. The principal feature of Hong Kong's trade with Britain during the year was the introduction by Her Majesty's Government on 26th October, 1964 of a 15% temporary import surcharge on all imports except basic raw materials, foodstuffs and a small list of other items. This policy, adopted as the quickest and most reliable short term measure to redress Britain's deteriorating balance of payments, was clearly of considerable significance to Hong Kong.
22
83. On the advice of the Trade and Industry Advisory Board, strong representations were made to Her Majesty's Government regarding Hong Kong's special economic dependence on trade with Britain and for some special mitigation of the surcharge in Hong Kong's favour. The response was to the effect that it was not possible to accord Hong Kong special treatment without violating the principle of non-discrimination which it was essential to maintain in the face of opposition by Britain's other trading partners. Hong Kong therefore found itself obliged to weather the storm as best it could.
84. In the event, the initial effects of the surcharge were not as serious as at first expected, but there were signs by the end of March that the long term effects would bite deeper. An announcement that the surcharge would be reduced to 10% on 27th April, 1965 produced great uncertainty, and stimulated further erosion of profit margins.
Nigeria
85. The discriminatory licensing restrictions against imports of Hong Kong textiles introduced in September 1963 were still in force on 31st March, 1965. Additionally, a wide range of imports, irrespective of source, was removed from Open General Licence during the period under review. The only item of significance to Hong Kong in this range was enamelware. Hong Kong's domestic exports of textiles and enamelware to Nigeria declined sharply during the year.
86. An officer of the Economic Branch of the Colonial Secretariat, briefed by the Branch, visited Lagos in August 1964 to discuss with senior Nigerian officials and to make known to them the serious view which the Hong Kong Government took of these discriminatory restric- tions. Subsequently the Director, London Office, had a meeting in London with the Nigerian Minister of Commerce and Industry. As a result of these representations, the restrictions in question were later substantially modified.
Malaysia
87. Indications of increased Malaysian protectionism continued to be a source of concern during the year, but there was little that could be done to ameliorate the situation, as restrictions were non-discriminatory and clearly designed to protect infant industries.
88. In June 1964, quantitative restrictions on imports of sugar into Malaya were introduced. Coupled with these quota restrictions, tariffs on imported sugar, designed to provide a high degree of protection for
23
the recently established Malayan sugar refining industry, were also sub- stantially increased. Prior to these measures Malaya was one of the largest buyers of Hong Kong refined sugar. In July the Malayan import duty on enamelware was raised from 10% to 35% ad valorem. In addition, the domestic enamelware industry in Malaya was accorded pioneer status— a status which brings with it certain tax exemptions and other advantages aimed at assisting infant industries to establish themselves firmly before being exposed to international competition. Malaya was formerly one of Hong Kong's most important markets for enamelware, but since 1962 this trade has declined steeply. The importation into Singapore of mono- sodium glutamate and all types of gourmet powder containing this sub- stance was also prohibited during the year.
Republic of South Africa
89. The South African Government rejected a submission made, at the request of the department, by the British Embassy in Pretoria protest- ing against the invocation of anti-dumping duties on Hong Kong goods. The grounds for the rejection were that the situation in Hong Kong is such that no accurate assessment of value for duty can be made and that some of the products exported to South Africa from Hong Kong originate in China. The South African view was subsequently challenged again by the British Embassy and a reply was awaited at the end of the
year.
90. In the first week of December 1964 talks were held in Hong Kong with the Chairman of the South African Board of Trade and Industries who explained the South African viewpoint and undertook on his return to South Africa to review the list of anti-dumping duties imposed against Hong Kong.
Spain
91. In July 1964 reports were received by the department that difficul- ties were being experienced by Spanish importers in obtaining customs clearance at Spanish ports for imports of liberalized goods from Hong Kong. The British Embassy in Madrid was therefore asked to enquire into these reports and to seek clarification of the position from the Spanish Ministry of Commerce. The Ministry admitted that delays in the clearance of certain import declarations were in fact occurring and gave as the reason that they were concerned about the real origin of these goods and the abnormally low prices at which they appeared to be imported. The Embassy subsequently presented an aide memoire to the Spanish authori- ties countering these allegations of dumping and stressing the efficiency
24
of the Hong Kong certification of origin system. Although no formal reply to this aide memoire has been received, there are indications that the situation has now improved considerably.
Iraq
92. In April 1964 the opportunity was taken to discuss informally with an Iraqi trade delegation, then en route to Japan, the subject of Iraq's ban on imports from Hong Kong. The delegation was unable to commit itself on this issue, but undertook to raise the matter in a favourable light on its return to Iraq. Shortly after the delegation's return the British Embassy in Baghdad was informed by the Iraqi authorities that the importation of Hong Kong goods into Iraq would be permitted on the same basis as the importation of similar goods from Japan. Since that date exports to Iraq have increased considerably. The main items concerned are paints, fireworks, textiles, machinery, toys and cutlery.
Ghana
93. Non discriminatory import licensing measures taken by the Ghanaian Government have resulted in a change in the pattern of Hong Kong's trade with that country. Exports of finished consumer goods have lost ground, while exports of semi-finished goods (e.g. cotton yarns) and capital goods (e.g. knitting machines) have increased considerably. The situation remains under study by the Branch.
Republic of Ireland
94. On 6th January, 1965 discriminatory restrictions on the impor- tation of certain types of textiles were announced by the Irish authorities and Hong Kong was named amongst sixteen supplier countries to which these restrictions applied. As the Republic of Ireland is not a contracting party to the G.A.T.T. or to the Long Term Cotton Textile Arrangement, the Irish authorities were not in breach of international obligations, introducing these restrictions. Enquiries instituted by the London Office indicated that there was little hope of the Irish authorities modifying them in Hong Kong's favour.
East Africa
TRADE MISSIONS
95. Until 1963, Government sponsored trade missions have been organized by the Trade Development Branch, the accent being on pro- moting interest in selling domestic products in markets which seemed
25
ripe for development. It must be confessed that such efforts have been crowned with less than success, partly for reasons not within the control of the department, but partly also from departmental inability to follow up or to foster interest subsequently by adequate publicity. In July 1964, the Trade and Industry Advisory Board advised that as part of its overseas trade promotion programme for 1965–66, the department explore the possibility of a mission to East Africa, the primary purpose of which would be to put Hong Kong on the political map in this area. The Branch was charged with organizing this mission, and despatched one of its officers on an exploratory tour in February 1965. As a result of his report, and on the further advice of the Board, it was decided that a mission, with an accent on the trading element, should visit East Africa in June 1965, its itinerary to be limited to Kenya, Uganda, Tanzania and Zambia. Preparations for the mission were in train by the Branch at the end of the year under review.
III. TEXTILES BRANCH
THE G.A.T.T. LONG TERM ARRANGEMENT REGARDING
INTERNATIONAL TRADE IN COTTON TEXTILES
96. The Long Term Cotton Textiles Arrangement valid for five years from 1st October 1962 was designed to develop international trade in cotton textiles among participating countries in an orderly manner. Under the provisions of this arrangement, the Governments of the United States of America, Canada, Norway, the Federal Republic of Germany and Italy have requested Hong Kong to restrain exports to their respective countries in a number of cotton textile categories. Where Hong Kong has agreed with these requests after negotiation, the responsibility for administering the necessary controls has been undertaken by the branch.
97. Export restraint levels for cotton textiles and clothing under the Arrangement and its precursor Short Term Arrangement and actual export performance are recorded in Table 2A. Although restraints in clothing categories have usually been negotiated in dozens, the cloth equivalent has been recorded for the U.S.A. to facilitate comparison.
98. The G.A.T.T. Cotton Textiles Committee met in Geneva early in December, 1964, to review the operation of the Long Term Arrangement during its second year. I represented Hong Kong at the meeting as a Member of the British delegation.
26
EXPORT OF COTTON MANUFACTURES TO BRITAIN
99. Britain is a party to the Long Term Cotton Textiles Arrangement, but restraints exercised by Hong Kong on exports to her of cotton textiles are outside the Arrangement under a bilateral agreement which pre-dated
it.
100. As the supplementary categorization agreement concluded after discussions with the British cotton textile industry in February 1964 was applicable to only one half of the 1964 quota, its restrictive effect was not keenly felt during last year, but other extraneous restrictive elements supervened, including the trading difficulties resulting from the imposition of the 15% import surcharge by the British Government in October. As a result only 87% of the 1964 quota which, including the supplementary yardage referred to in the next paragraph, totalled approximately 189 million sq. yds. was shipped by the end of 1964 as opposed to nearly 100% in 1962 and 98% in 1963, as may be seen from Table 2B. Shortly after the announcement of the surcharge, the department extended the validity of 1964 quotas and export authorizations until 31st March, 1965. A further extension to 30th April was subsequently granted.
101. In a review initiated by Hong Kong during the summer and negotiated by officers of the department on the advice of the Cotton Advisory Board, the supplementary quota arrangements provided in the 1963-65 agreement were exchanged for an additional total of 14.55 million sq. yds. for use during 1964 and 1965. The yardage was distributed among the three main groups of textiles in proportion to the division of the basic quota and was subsequently allocated to quota holders on a pro rata basis.
Domestic Aspects
102. In the early part of 1965, the method of allocating loomstate quotas was changed on the advice of the Cotton Advisory Board. Quota holders received allocations in proportion to the degree their quota was utilized in the previous year. The former formula which took account of the number of looms installed in a factory was abandoned. In this way, it was no longer necessary to ensure through inspection that the same number of looms on which quotas were previously allocated remained in operation, and difficulties over replacement were avoided. In fact, as 1964 loomstate quota had been fully utilized, there was no immediate change in the allocation of these quotas.
103. The High Hong Kong Cost Content Scheme for finished piece- goods, first introduced in 1963 to promote exports of quality goods
27
yielding the best financial return to the economy, was modified on several occasions during 1964 in view of the comparatively poor rate of shipment under the scheme. Of the 20 million sq. yds. set aside under the scheme for 1964 only 12 million sq. yds. had been utilized by the end of 1964, leaving a balance of 8 million sq. yds. to be carried over for use during the first half of 1965. For 1965, 15 million sq. yds. were allocated under a quota system to shippers/finishers/weavers on a 40:30:30 ratio in accordance with their export performance, whilst 5 million sq. yds. were allotted for the operation of the High Cost Content Scheme. With a downward revision of the minimum cost content to qualify for allocation, demand for yardage increased especially towards the end of March, leaving only a very small quantity available for further allocation.
104. The 'High Cost Content Scheme' for garments and made-up goods continued to operate successfully during 1964 and a basic reserve of 20 million sq. yds. was again set aside for export under the scheme during 1965.
EXPORT OF COTTON MANUFACTURES TO THE
UNITED STATES OF AMERICA
105. The restraints imposed upon cotton textile exports to the United States during the second year of the Long Term Arrangement continued into the third year commencing 1st October, 1964 without significant changes.
106. A serious classification problem over blouse sets caused consider- able delay to the finalization of negotiations with the U.S. Government on the arrangements for the third textile year. The agreement concluded in the middle of September brought 36 categories under restraint, repre- senting 275 million sq. yds. or about 97% of the trade in cotton textiles with the U.S. 33 categories were subject to quota control and 3 restricted categories were regulated by export authorization whereby companies holding firm orders from United States buyers were assured of an export licence within the following three months. The extension of export authorizations to unrestrained categories also was made possible by the agreement of the United States that no goods so authorized for export would be refused entry. The overall restraint level represented a growth of 5% over that for the second textile year as specified in the provisions of the Long Term Arrangement.
107. Exports of restrained cotton goods to the United States during the second textile year ending 30th September, 1964 on the whole proved
28
satisfactory, amounting to 242 million sq. yds. or 97% of the total maxi- mum export level. (In the two previous textile years, exports were 99% and 98% respectively.) Performance in certain piecegoods categories was however poor, due mainly to the uncertainty in the U.S. market caused by the introduction of one-price cotton legislation and changes in demand for particular fabrics.
108. The shipment performance during the first half of the third textile year was satisfactory, nearly 133.5 million sq. yds. or 50% of the annual quota being exported in the period.
Canada
EXPORT OF COTTON MANUFACTURES TO OTHER COUNTRIES
109. At the request of the Canadian Government Hong Kong con- tinued to apply restraint during the third Long Term year to exports of the six garment categories subject to control in the preceding year. In addition, six fabric categories and one garment category were brought under restraint after protracted negotiations in Ottawa and in Hong Kong. The restraint levels established for the third year totalled 21 million sq. yds. and represented an overall growth of 3% over the previous annual levels.
Western Germany
110. During the third year of the Long Term Arrangement, only cotton woven nightwear exported to the Federal Republic was subject to restraint. The quota level was 380,000 dozen representing an 8.5% increase over the previous year. Exports of cotton woven shirts and towels were regulated by an export authorization system in order to assure shippers of contractual security and to permit forward assessment of the rate of exports.
Norway
111. Exports of woven nightwear and shirts for work, sport and leisure remained under quota control in accordance with the terms of the bilateral agreement with the Norwegian Government entered into for five years effective from October, 1962. The quotas for the second and third textile years were 18,000 dozen and 20,000 dozen respectively.
Italy
112.
Following negotiations held in Rome between representatives of the Italian Government and the Director, it was agreed in March,
29
1965 that the overall restraint level for export of five cotton woven fabrics as a group should be 600 metric tons (or approximately 4.68 million sq. yds.) for the period 16th March to 31st December, 1965. Subsequently quotas were allocated to shippers and manufacturers in proportion to their past shipment performance.
WOOLLEN KNITWEAR EXPORTS
113. The understanding reached in February 1964 with the Federal Republic of Germany whereby exports of woollen knitwear (largely women's sweaters, cardigans, etc.) were placed under export authorization was operated by the branch, and was useful to shippers, German buyers, and the Federal Government in that it imparted stability to the trade. The rate of increase of exports declined substantially as the department expected; the actual increase in 1964 over 1963 was 60%, which, although large, was much less than the increase in 1963 over 1962.
IV. CERTIFICATION OF ORIGIN BRANCH
GENERAL
114. The Certification Branch issued 442,494 standard, commonwealth preference, and comprehensive certificates of origin an increase of 0.9% over last year. The declared value of goods certified was $3,057.7 million representing 66.6% of the total value of Hong Kong products shipped during the year. The total, when compared with $2,685 million for the previous year, showed an increase of 13.9%.
115. The number of separate manufacturing establishments registered with the department for the issue of certificates on 31st March, 1965 was 5,517, a net increase of 135 over last year. Of the 985 new factories regis- tered during the year, about 60% were textile mills, while factories for plasticware and metalware accounted for about 20% and 10% respec- tively.
116. Table 3 records the number of the various types of certificates issued and the declared value of the goods certified together with corres- ponding figures for the two previous years.
STANDARD CERTIFICATES OF ORIGIN
117. Standard certificates of origin issued during the year totalled 145,098, an increase of 2.2% over the preceding year's total. The declared
30
value of goods certified showed an increase of 18.7% compared with last year's figure.
COMMONWEALTH PREFERENCE CERTIFICATES
118. The number of Commonwealth preference certificates, including E Forms XS 120, E/COM Forms XS 113, D Forms XS 119 and D/COM Forms X112, issued during the year was 112,966, an increase of 1.7% over the total for the preceding year. The declared value of goods covered by these certificates increased by 6.3% over the preceding year.
119. The department continued to ensure uniformity of practice among approved accountants in the preparation of cost statements which, together with specific raw material undertakings given by manufacturers, form the basis of all claims to preference. In addition to guidance on general principles and practice, a number of circulars dealing with in- dividual territorial requirements were also issued to accountants.
120. Until 1963 all factory undertakings specifying use of Common- wealth origin raw materials for preference purposes were given exclusively to H.M. Commissioners of Customs and Excise in London. These under- takings are now also required to be given to the department, and the revised procedure has been of great assistance in supervising factories exporting to Britain under claims to preference.
COMPREHENSIVE CERTIFICATES OF ORIGIN
121. The total number of commercial comprehensive certificates issued was 39,059, representing an increase of 17.7%. The value of goods exported under these certificates showed an increase of 20.0%.
122. During the year no new commodity was added to the list of goods subject to comprehensive certification.
123. The United States Government agreed to relax procedures so that submission of production and sales returns was no longer required.
124. In an effort to improve the effectiveness of the comprehensive certification system, a proposal was made to the United States Govern- ment to adopt a simplified and standardized set of procedures.
125. The value of mail order, tourist, and gift plan certificates is not recorded. The number of mail order certificates continues to increase rapidly-by 26.7% in the year under review. But tourist and gift plan certificates underwent a downturn-by 9.7% and 9.0% respectively.
31
MISCELLANEOUS CERTIFICATES
126. Certificates of processing for goods not entitled under the rules to standard certificates of origin continued to be the most widely used of the miscellaneous certificates issued by the department.
127. The department also verified the signatures of the Superintendent of Gardens on phytosanitary certificates; the Director of Agriculture and Fisheries on certificates of origin for natural produce exported; and of certain medical practitioners on phytopathological certificates for hide and hair.
128. The Branch issued 3,321 certificates of this group, an increase of 1,146 or 52.7% over last year. The remarkable increase was due to the rapid increase in the export under certificates of processing, mainly to African countries, of many new items assembled or processed in Hong Kong. These included watches, transistor radios and printed fabrics.
CHANGES IN CERTIFICATION REQUIREMENTS ON VARIOUS TERRITORIES
129. The French Government notified the department that certificates of origin were required only in respect of certain categories of goods imported from Hong Kong. These certificates had to specify a British Commonwealth content of not less than 50% of the total factory cost.
130. The Governments of Kenya and Zanzibar agreed to discontinue the requirement for Government certificates of origin for goods imported from Hong Kong.
131. The Government of New Zealand reduced the Commonwealth content requirement for Hong Kong products exported to the Cook Islands from 50% to 25%.
132. With the granting of preference to certain categories of goods originating within the Commonwealth, the Singapore Customs agreed to accept the department's Commonwealth preference certificates to substantiate any claim of Commonwealth origin of goods imported from Hong Kong.
CERTIFICATION CO-ORDINATION COMMITTEE
133. As in previous years, the department continued its efforts to bring about acceptance by overseas Customs authorities of certificates of origin issued by the Hong Kong General Chamber of Commerce, the Indian Chamber of Commerce and the Federation of Hong Kong Industries, all of which are designated by Government as competent
32
to issue certificates of origin under the International Convention relating to the Simplification of Customs Formalities, 1923.
134. The Certification Co-ordination Committee, which comprises members of all the designated organizations and is chaired by the Assistant Director, Textiles and Certification Division, met on four occasions to ensure a uniform approach to origin criteria, certification procedures and negotiations with overseas authorities on origin matters generally.
135. To examine the possibility of establishing origin criteria for products with marginal Hong Kong cost content an Origin Criteria Sub-Committee was formed to make recommendations to the main committee.
COMPREHENSIVE CERTIFICATES OF ORIGIN COTTON COMMITTEE
136. The Comprehensive Certificates of Origin Cotton Committee, made up of members from all sectors of the cotton textile industry and representatives of the department, was set up to advise and assist in administering procedures for the export of Hong Kong manufactured cotton goods to the United States of America.
PUBLICATIONS
137. In conjunction with the Hong Kong General Chamber of Com- merce, the Indian Chamber of Commerce and the Federation of Hong Kong Industries, the department published a Certification of Origin booklet. Printed in four languages, English, French, Italian and German, and widely distributed, the booklet describes the systems employed for substantiating the origin of Hong Kong products or certifying that of imported ones.
STATISTICS AND SURVEYS
138. The Branch continued to compile statistics of goods exported under various types of certificates at monthly and quarterly intervals.
139. At the request of the Labour Department a study of the Hong Kong garment industry was compiled from information available in the Certification Branch. The results were used by the Hong Kong delegation at a meeting of the International Labour Organization's Technical Committee on Textile and Clothing.
33
VISITS
140. In September 1964 three members of the British Cotton Board, who were on a goodwill visit here as guests of the Government of Hong Kong, visited the Certification Branch when the system of control of factories exporting to Britain under claims to preference was explained.
141. In March 1965 representatives from the consulates and trade commissions of Belgium, Britain, France, the Federal Republic of Germany, the Netherlands, New Zealand, Norway and the United States of America visited the Certification Branch. The visit was arranged to afford them an opportunity to see the certification methods of the department and the operation of its various systems and procedures.
REVENUE
142. Fees for certificates of origin are collected in the form of stamp duties, which are $10 for standard and commonwealth preference cer- tificates, $35 for commercial comprehensive certificates, and $5 for all other certificates. Revenue from certificates amounted to $4,702,135, 5% more than in the previous year.
V. INDUSTRY INSPECTION BRANCH
GENERAL
143. In November, 1964 the Industry Inspection Section and elements of the Investigation Section of the Preventive Service, together with the Investigation Section and the Kowloon Inspection Control of the Cer- tification Branch were amalgamated to form a new branch under an Assistant Chief Preventive Officer responsible for operations and inves- tigations directly to the Assistant Director in charge of the Certification/ Textiles Division. This organizational change anticipated the establishment of an Industry Inspection Branch staffed by a new grade of officer.
144. The Industry Inspection Branch is essentially an integral part of the system under which the department issues various types of cer- tificates of origin, and is responsible for the physical policing of the complicated administrative controls which have had to be introduced progressively during the past twelve years. The efficient functioning of the Industry Inspection Branch has accordingly become of very great importance to the acceptance of Hong Kong products overseas and therefore to the trade promotional efforts of the Colony and to its good name abroad. The essence of the operation of the Branch lies in the
34
registration of factories for certification purposes after assessment of their productive capacity, ability to comply with approved procedures, and so on, and the subsequent issue to these factories of certificates of various types relating to specific exports. The Branch therefore principally operates a policing system, undertaking routine but quite often detailed factory inspections; spot checks individual consignments; and investigates if anyting untoward is discovered or suspected. There are at present over 5,000 registered factories for the issue of various certificates; over 36,000 certificates are issued each month; and well over one thousand individual factory or consignment inspections are carried out monthly. These give rise to a large number of detailed, complicated and time- consuming investigations, some of which result in prosecutions, in departmental suspension of certification or on occasion cancellation of registration.
145. The new branch transferred from the Preventive Service offices at Kwun Tong to 1, Ma Tau Kok Road, 5th floor on 15th March, 1965, the occasion being highlighted by the change from uniform to civilian clothes. The branch with a strength of 43 officers was operating well below its approved establishment of 70 at the end of the year.
INSPECTIONS
146. The number of factory inspections carried out during the year was 14,033, a decrease of 1,030 as compared with last year. This is because the figures for 1964–65, unlike previous years, do not include strategic commodities end-use inspection which remained the responsibility of the Preventive Service. Comparative figures for field inspections carried out during the last three years are as follows:
1962-63 1963-64
1964-65
...
13,074 15,063
14,033
147. The inspection figures for 1964-65 break down into categories as indicated below:
(i) Initial registration for Certificates of Origin
(iii) Preference undertaking
(ii) Routine re-inspection
(iv) Comprehensive Certificates of Origin procedure
(v) Comprehensive Certificates of Origin (Tourist application
checks)
(vi) Textile quota controls...
(vii) Consignment spot checks
Total
...
35
2,475 7,515
998
...
2,338
321
258
128
14,033
KOWLOON INSPECTION CONTROL
148. In addition to field inspections, the Kowloon Inspection Control, situated in the Hong Kong and Kowloon Wharf and Godown Co.'s premises, carried out examinations for certain specific classes of goods as follows:
(i) Selected items under Comprehensive
Certificates of Origin (Commercial)
(ii) Embroidered handkerchief and naperies under
Standard Certificates of Origin/Commonwealth Preference Certificates
...
1964-65 1963-64 1962-63
16,999 15,709 13,890
18
28
40
(iii) Cotton garments and made-ups exported to
the United Kingdom under the high cost content scheme
3,377
3,421
570
(iv) Antiques to the United Kingdom
36
Nil
Total
20,430 19,158 14,500
149. As a result of inspection and examination, 42 applications were referred for further investigation in order to substantiate origin of the consignments.
INVESTIGATIONS
150. Investigation staff were fully engaged on investigations opened as a result of information from the public or reports from branch officers of failures to comply with procedures governing origin certification. 295 investigations were initiated and 280 concluded during the period. 75 factories were notified and warned of technical infringements of departmental registration procedures or legally actionable undertakings where it was within their power to take immediate remedial action. The registration of 60 factories was suspended for a total period of 104 months and a further eleven factories were suspended pending completion of full investigations.
151. Sixteen factories and tourist shops were removed from the certification register due to malpractice.
152. Factories affected by these sanctions broadly fell into two groups: (a) jade factories and tourist shops for breaches of their conditions
of registration; and
(b) cotton textile factories for breaches of preference undertakings both to the department and H. M. Customs and Excise, London.
36
PROSECUTIONS
153. Fifteen factories and exporting companies were prosecuted for making false declarations on applications for certificates of origin or breaches of undertakings to the department. These are summarized below:
(i) Total actions
(ii) Persons arrested
Persons or companies summoned
(iii) Total fines
+
...
28
3
12
$17,865
154. Close liaison was maintained with overseas Customs authorities particularly those of the United Kingdom and other Commonwealth territories.
VI. INDUSTRIAL DEVELOPMENT BRANCH
REVIEW OF INDUSTRY
Textile Spinning
155. At the end of the period under review, there were 31 cotton spinning factories registered with the department for certification of origin purposes, employing over 21,000 workers, and operating about 715,500 spindles, an increase of 82,500 over the total at the end of the previous year. Production of cotton yarn was approximately 261 million lbs. ranging mainly from 10s. to 60s. counts, carded and combed in single or multiple threads.
156. Wool spinning further expanded during the year and production of woollen and worsted yarn increased by about 9%, from 11.3 million lbs. in 1963 to 12.3 million lbs.
Textile Weaving
157. Expansion in the capacity of the cotton weaving sector of the textile industry continued on a diminishing scale. At the end of March 1965, there were 178 (174) cotton weaving factories registered with the department for certificates of origin, with a total of 20,700 (19,700) looms installed.
158. Total production of cotton piecegoods was approximately 579 (560) million square yards, and consisted chiefly of cotton grey drill, shirtings, poplin, gingham, canvas and other bleached and dyed cloth and prints.
.
37
Textile Finishing
159. With the ending of the acute water shortage, the finishing industry fared more satisfactorily. Improvements continued to be made in existing processes, particularly with regard to the dyeing and finishing of polyester fabrics. One of the latest developments related to the finishing of fabrics for the production of certain categories of children's nightwear in order to meet new flame-resistant standards introduced in Britain.
Cotton Knitting
160. One of the oldest sectors of the textile industry, cotton knitting, showed no spectacular development during the year. According to records compiled by the Labour Department, at the end of March, 1965 there were 247 cotton knitting mills employing 10,237 workers. Products were principally cotton interlock materials for use by the garment industry. Warp-knitted cotton fabrics were also produced.
Woollen Knitting
161. The very rapid growth of the woollen knitwear industry con- tinued; exports of woollen knitwear of all types, including gloves, amounted to over $386 million, an increase of 35.9% over the previous year. At the end of March, 1965, there were 172 factories in operation, employing 12,951 workers.
Wearing Apparel
162. Hong Kong manufactures an almost unlimited range and variety of garments including shirts, underwear, outerwear (both knitted and woven), neckwear, gloves, hats and caps, socks and stockings. By the end of March, 1965, the industry employed a labour force in excess of 64,700 (66,000) workers in 1,100 (1,163) industrial undertakings. The value of exports in 1964-65 reached $1,684 million, an increase of 17.8% on the value for the previous year. The tendency to 'trade up' and produce better quality garments continued. This is a natural evolution in a maturing industry, accelerated by the quantitative limitations imposed by certain importing countries.
Plastics
163. The plasticware industry continued to expand. In March 1965, there were 42,046 (42,087) workers employed in some 1,205 (1,185) factories. Exports increased in virtually every sector of this industry.
38
164. Plastic flowers, fruit and foliage continued to be in strong demand, with exports increasing from $233.6 million in 1963–64 to $276.6 million in 1964–65.
165. Manufacturers of plastic dolls and toys once again showed themselves capable of keeping up with the ever-changing trends of fashion. Exports showed a very satisfactory increase, being valued at $254.7 million compared with $184.7 million for the previous year.
166. The production of other plastic products, principally house- holdware, also continued to expand. The standard lines in household plastic goods, already covering a wide range, were augmented. Furniture of polypropylene and fibre-glass reinforced plastic continued to gain popularity, both locally and in export markets. For industrial use, the manufacture of rigid P.V.C. tubes and pipes, P.V.C. corrugated panelling and P.V.C. covered fabrics figured prominently.
Light Metal Products
167. By March 1965, there were 1,037 (1,020) factories manufacting light metal products with a total labour force of 32,745 (32,300). Enamel- ware and metal torches continued to be the largest sectors of this industry.
168. The enamelware industry continued its gradual decline as more developing countries undertake their own manufacture, sometimes with assistance from Hong Kong. Exports of enamelware for the period 1964-65 amounted to $48.6 (56.2) million. One factory ceased operation, and the total work force fell from 3,827 to 3,122.
169. Hand torches and lanterns continued to be one of the major lines. There was a further slight increase in the number of factories (from 43 to 45), but the number of workers dropped from 5,834 to 5,511. Exports amounted to $68.2 million as against $43.9 million in the previous
year.
170. Substantial development was shown in the stainless steel cutlery industry, which, from negligible exports in 1960, showed a remarkable export performance of $11.33 million in 1964. At the end of 1964, there were nine factories, employing 1,403 workers.
Electronics
171. By far the most dramatic development was in the electronics industry, particularly in the transistor radio sector. The rapid expansion experienced in the previous year continued at very much the same rate. In March, 1965, there were 32 factories producing radios. Although certain components were still imported, an increasing number and variety were produced locally, including transistors.
39
172.
An indication of the continued growth of this industry can be seen from the export figures, valued at $96 million in 1964–65, compared with $78 million in the previous year, and $39 million in 1963. Production consisted mainly of pocket radios having 6 transistors and 1 wave band, but larger multi-wave band models were also produced. Production of F.M. receiving sets and transceivers was in the experimental stage, and one firm was known to be assembling television receiving sets.
Machinery
173. The manufacture of machinery, mainly for sale to local factories and workshops, continued to expand. Machines produced include textile machinery, diesel engines, diesel operated generators and pumps, plastic moulding machines, power presses, lathes, planing machines and platen presses.
Shipbuilding
174.
Activity in the shipbuilding and repair industry continued satisfactorily, with orders both from overseas and locally, mainly for repair and maintenance work. In March 1965 the industry employed 10,842 (9,300) workers.
175.
Small vessels continued to sell well, with fibreglass reinforced plastic hulled craft gaining rapid and increasing acceptance in overseas markets. Exports for the year of yachts, pleasure cruisers and other small craft were valued at $17.88 million.
Shipbreaking and Steel Rolling Mills
176. The year was disappointing for the shipbreaking industry. There was a marked decrease in the number of vessels broken up, viz. 25 (70) vessels totalling 164,000 (483,000) gross tons. The reason for this decline was basically that, for the first time in some years, virtually the whole of the world's dry cargo fleet was fully employed. As a result, shipowners were retaining vessels which would otherwise have been offered for scrapping. Other inhibiting factors included the decline in demand for steel scrap in Japan, the main export market, and some falling off in demand for mild steel bars by the domestic construction industry. In the steel rolling sector, statistics published by the Labour Department at the end of March 1965 show there were 25 steel rolling mills employing 1,986 workers. Average monthly production in the calendar year 1964 was estimated to be in the region of some 18,000 tons which includes steel bars, rounds, channels, and foundry castings, but this rate of production was not being maintained in 1965. It is estimated that production dropped by some 15%.
40
+
177. Progress towards the relocation of the shipbreaking and steel rolling industries in the sites at Junk Bay sold for the purpose in 1963 was delayed in 1964 due to unexpectedly heavy dredging work and damage to half-formed sites by the several typhoons which struck the Colony.
178. Production of stainless steel and certain non-ferrous alloys is still in an experimental stage. Production of bars and aluminium sheets, strips and circles continued to flourish satisfactorily.
LAND FOR INDUSTRY
179. To deal with requests for information and assistance in obtaining sites or premises for industry, the Branch maintained up-to-date informa- tion on the major industrial development schemes, and factory premises built by the private sector, available for rent.
Kwun Tong
180. By the end of March, 1965, reclamation to form the site of the Kwun Tong industrial suburb of Kowloon was nearly completed. In March 1965, 243 (188) factories were in operation there, and construction work was completed or in progress on a further 56 (25) sites. During 1964-65, only 41 (80) sites were sold, as compared to 80 the previous year, individual areas auctioned varied from 2,100 (3,258) sq. ft. to 81,990 (62,670) sq. ft. and sites were sold at prices ranging from $46.82 ($32.63) to $98.44 ($118.18) a sq. ft.
Tsuen Wan and District
181. The second large land development and reclamation scheme in the Tsuen Wan area of the New Territories went ahead satisfactorily. This scheme is designed to create an industrial town of 1.2 million people in the area of Tsuen Wan, Kwai Chung and Tsing Yi Island.
Other Areas
182. During the year 34 (48) industrial sites ranging from 3,741 sq. ft. to 48,330 sq. ft. were sold in San Po Kong, Aberdeen, Chai Wan and To Kwa Wan.
INDUSTRIAL CO-OPERATION
183. In common with most other developing countries, Hong Kong is anxious to attract capital and/or expertise into various forms of joint enterprise with its industrialists or commercial entrepreneurs. The In- dustrial Development Branch is responsible within the department for
41
activities in this sphere, including liaison with trade and industrial associations, the special representative of the Hong Kong and Shanghai Banking Corporation employed for this purpose, and the Government Information Services. Its staff discussed with overseas visitors 84 enquiries in this field. In addition, approximately 150 visitors called on officers of the Branch to assist them with introductions to or information on possible suppliers of goods in which they were interested, including organizing visits to particular factories.
184. During the year, the Branch collaborated with the Information Services Department to produce material for a 'Joint Ventures' hand-out booklet.
WATER SUPPLIES FOR INDUSTRY
185. The severe drought of 1963 had called into being the Colonial Secretary's Water Committee, a sub-committee of which under the Chairmanship of the Deputy Director was concerned specifically with water supplies to industry, especially the textile finishing industry. This committee was to a major extent serviced by the Industrial Development Branch, using as primary data material derived from the elementary industrial production census conducted in 1963 in respect of the year 1962. 186. During the first half year of 1964, the sub-committee continued very active until late rains relieved the situation for industry, enabling the Branch to devote its energies to its primary task. The sub-committee was then disbanded. A casualty in part of the drought was quarterly production statistics, diversion efforts for obtaining which led to the inevitable decision to suspend routine collection of the statistics by the methods hitherto employed.
187. Industry generally met with heroic patience and remarkable resource the problems caused by the water shortage in 1963 and 1964, as instanced by its ability to increase its exports so substantially during 1964.
PRODUCTIVITY
188. The Working Committee on Productivity was appointed by His Excellency the Governor on the 4th March, 1963, to examine in- dustrial productivity in Hong Kong and to advise on the measures which might be necessary to assist industry to attain greater productivity. The committee, which consisted of the representatives of the Federation of Hong Kong Industries, the Chinese Manufacturers' Association, the Hong Kong General Chamber of Commerce, the Management Association and the University of Hong Kong, as well as officers of a
42
number of Government departments concerned with productivity, published its report in July 1964. As a result of its deliberations the committee recommended that there should be established in Hong Kong a Productivity Council and a Productivity Centre to supplement and co-ordinate the work on productivity already being carried out in the Colony.
189. The report recommended that the Council should be a general advisory and policy making body overseeing by means of an Executive Committee the operation of an autonomous Productivity Centre. The centre itself should be headed by an Executive Director.
190. The proposals in the report envisage that the centre, when fully developed, will include a training section to deal both with the direct training of individuals and with the training of trainers, consultants and specialists. It will also have a functional section which will engage in management consultation and technical assistance to industry generally and run a service for small industries. The centre will maintain contact with international organizations, provide liaison with local organizations engaged in productivity promotion and publicize the need for increased productivity. The research section will deal with statistics, technical information and translation work and provide a specialist library.
191. The report was accepted by the Governor in Council in November, and at the same time Government accepted in principle the provision of $12.5 million intended to cover the first five years' expenditure in the Productivity Centre's establishment.
192. An important step towards the establishment of a centre was taken during March with the appointment of a provisional Productivity Council. This twenty-one member Council, under the chairmanship of the Director, comprises persons drawn from management, organized labour, academic interests and Government. The first duty of the Council was the recruitment of an Executive Director to organize the Productivity Centre and the preparation of drafting instructions for legislation in- corporating the Statutory Council. The department is responsible for servicing the Council and for preparing and distributing papers for its consideration.
ASIAN PRODUCTIVITY ORGANIZATION
193. Hong Kong joined the Asian Productivity Organization in June 1963 and has already benefitted considerably from its membership. Hong Kong has also contributed to the activities of the A.P.O. in a positive way by organizing two seminars, financed by Government, sponsored
43
by the Asian Productivity Organization and implemented by the Hong Kong Management Association. The first seminar on 'The Role of Senior Management in achieving Higher Productivity' was held in February and was opened by His Excellency the Governor.
194. The second seminar 'The Practice on Quality Control in Promot- ing Productivity' was held in March. In addition to local participants all member countries of the Asian Productivity Organization were represented at the seminars.
195. Servicing the Asian Productivity Organization in Hong Kong is to be shared between the Industrial Development Branch and the Hong Kong Management Association.
MISCELLANEOUS
U.N. Economic Commission for Asia and the Far East
196. The Branch was responsible for briefing the Hong Kong delega- tion to the 17th Session of the E.C.A.F.E. Committee on Industry and Natural Resources held in Bangkok between the 4th and 15th of February, 1965. The Colony was represented by a three man delegation led by Mr. T. K. ANN, a member of the Trade and Industry Advisory Board.
Dangerous Toys
197. In June 1964, the Department was informed by the Government's London Office that a young child in Bournemouth had been found to be suffering from lead poisoning. This was believed to have resulted from the child chewing a toy screwdriver, part of a toy tool kit made entirely of plastic coated with paint and imported from Hong Kong. The screwdriver was subjected to careful tests by the health authorities in Britain, and was found to have 2,630 parts per million lead content. 198. On receipt of this information, the Department, after consulta- tion with the Labour Department and the Government Chemist, issued a circular to all plastic toy manufacturers registered with the Department, and to the three main associations, pointing out the necessity to use pigments that were free from lead content.
199. In the meantime, four more cases of lead poisoning were reported in Poole, and misleading press reports in the United Kingdom ascribed these to Hong Kong toys. It was later found by the British medical authorities that two of these cases were caused by children eating garden soil which had been contaminated by lead; another was suspected to have resulted from the paint on a child's cot; and the cause of the fourth case could not be determined.
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200. The Hong Kong manufacturer of the toy leading to the Bourne- mouth case, when located, agreed to stop deliveries until samples of his raw materials and stock of toys had been analysed. When the results indicated a high concentration in some of them, he readily agreed to destroy all stocks of such toys under Preventive Service supervision.
201. Extensive checks were also carried out by the Labout Department on plastic compounds and dyestuffs used in the manufacture of toys, in the course of which one further factory was found to have some prod- ucts containing a high lead concentration. With its agreement, these items were destroyed under Preventive Service supervision.
202. Some dispute was reported in the United Kingdom between health authorities as to the actual hazards caused by the toys in question. Experts in Britain were of the opinion that only soluble lead constituted a danger, and that even this, when locked inside impervious water- repellent plastic, was not particularly hazardous. The Home Office held a meeting with leading toxicologists and scientists to discuss the matter, and in September 1964 issued a press notice to the effect that the presence of lead in plastic toys was in such a form that it was unlikely to endanger health. There would be no prohibition of sales of existing stocks of plastic toys in Britain. However, the Home Office considered it undesirable that children's toys should contain lead, and to this end, advised United Kingdom importers that in future the total lead content, i.e. soluble and insoluble, of plastic toys should not be in excess of 250 p.p.m. Hong Kong manufacturers and exporters were advised accordingly by circular. A number of leading exporters arranged with public analysts overseas to analyse toy samples prior to shipment in bulk.
Assistance to the Immigration Department
203. The Branch continued to assist the Immigration Department with checking the credentials of overseas businessmen and industrialists and their claims to establish themselves in Hong Kong for greater or less periods.
VII. TRADE DEVELOPMENT BRANCH
OVERSEAS ACTIVITIES
Milan International Samples Fair
204. Hong Kong participated for the first time with an official exhibit at the Milan International Samples Fair, 12th to 25th April, 1964. The
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display was mounted by the department in a pavilion approximately 1,900 sq. ft. in area. In previous years, national representation had been restricted to official information offices, and the offer of a pavilion to Hong Kong represented a major departure from established policy. In addition to the pavilion, the department organized a trade information office in the International Trade Centre situated close by, where delegates were able to answer business enquiries in detail and discuss with visitors the prospects of joint industrial enterprises. The Hong Kong Tourist Association had a small stand in the pavilion, and several Hong Kong companies participated separately in the various halls reserved for classi- fied groups of products.
205. The delegation to Milan was led by the Hon. J. D. Clague, C.B.E., M.C., with Mr. TANG Wo as deputy leader. Other members of the delegation were Messrs. D. J. R. BLAKER, J. B. KITE, Secretary of the Hong Kong General Chamber of Commerce, Daniel Koo, Eric F. C. Li, D. C. LYTH, R. J. PICCIOTTO, H. C. YUNG, W. T. WILKINSON and three representatives from the department. In addition, eight skilled craftsmen and women from four companies, representing ivory carving, hand painted wallpaper, carpet weaving and hand embroidery attended to demonstrate their respective skills. The craftspeople worked in the pavilion and attracted considerable interest and much valuable publicity.
206. A total of 676 enquiries were recorded during the fair. Items which attracted most interest were textiles, toys, transistor radios, batteries and plastic products. Very good press coverage was obtained in leading north Italian newspapers and arrangements were made for a short newsreel of the pavilion to be featured in Italian cinemas.
207. The total cost of official participation in this fair was approxi- mately $363,000.
Seventh United States World Trade Fair, San Francisco
208. It had been widely recognized for some time that participation in a suitable fair in California would present a good opportunity for expanding exports to the west coast of America. When invitations from the fair authorities to exhibit in the 7th United States World Trade Fair in San Francisco from 10th to 20th September, 1964 were received, the Hong Kong General Chamber of Commerce, the Federation of Hong Kong Industries and the Chinese Manufacturers' Association all expressed interest in participating. The Trade and Industry Advisory Board recom- mended that the department sponsor official participation.
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209. Planning was carried out by a committee consisting of representa- tives of the Board, the Chamber, Federation, Manufacturers' Association and the department. The exhibit was primarily commercial, the depart- ment's role being to administer and co-ordinate.
210. The Hong Kong display comprised three main sections located in two adjacent stands measuring 5,100 sq. ft. and 1,200 sq. ft. respectively. The larger stand included thirty independent exhibits by Hong Kong companies, the Hongkong & Shanghai Banking Corporation, the Tourist Association and a small prestige display of products arranged by the department. The centre piece of this stand was a 30 foot pleasure junk which attracted considerable attention and was prominently featured in the local press. The smaller stand consisted of a joint display by members of the Chinese Manufacturers' Association.
211. The Hong Kong delegation was led by the Hon. F. S. LI, O.B.E., and included Mr. J. S. LEE, deputy leader and Messrs. K. LAM, H. C. YUNG, D. W. LEACH, K. T. Woo, a representative from the Information Services Department and two members of the department.
212. The number of enquiries recorded by exhibitors was nearly 11,000. Products which attracted most interest included garments, brocade piecegoods, wigs, carved ivoryware, carpets, furniture, capoz shell lamps, artificial birds, flashlights, kerosene heaters and rubber footwear. The stand received excellent press, radio and television publicity in California. It is estimated that approximately 270,000 people including 30,000 buyers visited the exhibition.
213. The total cost of official participation in this fair was approxi- mately $234,000.
Planning and Preliminary Work for Future Overseas Activities
214. In order to consolidate the impact made at the Milan Inter- national Samples Fair 1964, the Trade and Industry Advisory Board agreed with the recommendation made by the leader of the Hong Kong delegation that the department should participate in the 1965 Milan Fair, with emphasis on the possibilities for co-operation between Italian and other European industries and those in Hong Kong through joint ventures and other forms of participation in Hong Kong's industrial development. In consequence, the Industrial Development Branch was charged with planning responsibility.
215. The Board also advised that the department should participate in the Tokyo International Trade Fair, 16th April to 6th May, 1965,
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because the fair attracted a large number of buyers from the United States and Japan itself was a large market becoming increasingly important to Hong Kong. (Exports to Japan rose from $76.6 million in 1962 to $120.6 million in 1963.) The Board also advised that Hong Kong's exhibit should take the form of a prestige display of selected products. An officer from the department visited Tokyo in November to discuss participation with the British Embassy, the trade fair authorities and a number of companies specializing in stand construction, customs formalities and public relations. 216. Preliminary work was inaugurated for a programme of store displays in principal industrial centres in Britain, beginning with a small- scale special prestige exhibition of Hong Kong products at the new trade and shopping centre in the Bull Ring, Birmingham. Arrangements were put in hand for participation on a small-scale for the third time at the Sydney International Trade Fair in October 1965. It was agreed that the branch would assist the Fire Services Department which had decided to participate in the International Fire Exhibition to be held in London in July 1965, by advising on trade fair procedures and arranging for collec- tion of locally manufactured equipment to be put on display.
217. There was a very full programme of preliminary work for the Trade Development Branch during the latter part of the year.
LOCAL TRADE EXHIBITIONS
Display Centre of Hong Kong Products
218. The Display Centre of Hong Kong Products inaugurated on a trial basis in October 1962, aims to display domestic manufactures in an attractive setting and to give a specialized service to prospective buyers. Conveniently situated in the High Block of the City Hall, the Centre continued during the year to be a point of contact between business visitors and local suppliers.
219. 9271 persons visited the Centre, 14% more than in the previous year. In addition, the Centre was visited by 5,804 students in organized groups. The Centre handled 10,808 enquiries, 42% more than in the pre- vious year, 5,550 of which came from overseas visitors.
220. It became clear during the year that the Display Centre was a valuable adjunct to the Colony's trade promotion efforts, despite official reservations about its utility. Its success was recognized by the decision of the Government that the Centre should be a continuing part of the Colony's trade promotion programme, although it was recognized that alternative premises would have to be found in the near future.
48221. Staff of the Centre assisted in the collection of exhibits for display at overseas trade fairs and exhibitions. In July, as a measure to promote local interest in overseas trade exhibitions, the Centre exhibited the prestige display of Hong Kong furniture and furnishings which was later shown at the San Francisco Trade Fair.
222. Running costs of the Display Centre, including staff salaries, amounted to approximately $136,000 over the period.
Inauguration of the Chinese Manufacturers' Association-Display Centre 223. On 10th April, 1964, I opened the Chinese Manufacturers' Asso- ciation Display Centre in the Association's new Building. The Centre features a wide range of goods produced by member firms; it differs from the City Hall display in that it is designed to advertise the products of particular manufacturers rather than to illustrate the range of Hong Kong products. The Department advised the Association on the principles it might adopt for the display, based on experience acquired at the City Hall Display Centre.
OVERSEAS TRADE MISSIONS, EXHIBITIONS, ETC.
224. The Trade Development Branch continued to assist visiting trade delegations and helped to smooth the arrangements for overseas trade exhibitions.
225. A Japanese Industrial Exhibition covering an area of 60,000 sq. ft. was on display in a specially constructed building at the Hung Hom Reclamation from 25th April to 10th May. The aim of the exhibition was not only to introduce the latest types of Japanese machinery to Hong Kong buyers, but also to promote mutual understanding and to develop trade connexions.
226. The first South African Exhibition to be organized in Hong Kong was held in the Ballroom of the City Hall from 26th October to 1st November. A wide range of products was displayed, with special emphasis on South African wines and foodstuffs.
227. A Historical Exhibition of Swiss Watches organized by the Federation of Swiss Watch Manufacturers was held from 12th to 15th October at the Hong Kong Hilton and from 17th to 24th October at the Miramar Hotel.
228. A Floating Exhibition of Australian Products sponsored by the Australian Chambers of Commerce Export Council visited the Colony in April. A series of displays, mounted aboard the m.v. 'Centaur', covered
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the whole range of Australian exports and were accompanied by a large group of businessmen from every state.
229. Another Floating Exhibition came from Sweden and was carried on board the m.s. 'Japan', which visited the Colony between 10th and 13th August. The products displayed covered a wide range of industrial products including heavy electrical equipment and engines of various kinds.
TRADE MISSIONS AND DELEGATIONS
230. Interest in the Hong Kong market aroused by the visit of the 'Centaur' was followed up by a number of delegations of businessmen from various parts of Australia. Two groups from Western Australia, one from the Chamber of Manufacturers and the other from the Perth Chamber of Commerce, visited the Colony in May and June respectively. A seven-man group from Queensland led by Mr. A. W. MUNRO, the Deputy Premier, came in August.
231. A twenty-nine member New Zealand trade mission led by Mr. L. R. Adams SCHNEIDER, parliamentary Under Secretary to the Ministers of Industries and Commerce and of Customs, visited the Colony in November to promote sales of that country's primary produce and manufactures.
232. Another Commonwealth country which showed great interest in Hong Kong was Canada, and four groups of businessmen and officials made visits during the year. A delegation of forty-five from the Vancouver Board of Trade, led by the President, arrived in April; while two ministers of the British Columbia Government, Mr. R. R. LOFFMARK and Mr. F. RICHTER, led another group from the Canadian west coast in June. A delegation from Ontario, led by Mr. S. J. RANDALL, Minister of Eco- nomics and Development in the provincial government, paid a visit in November; and a twelve-member travel and trade mission, led by Monsieur R. PREVOST, a Minister of the Quebec Government, came in March.
233. Interest in the Colony on the part of the United States remained high. Trade groups from Maryland (April), New Orleans (August) and San Francisco (February) paid visits of varying duration.
234. From Europe came trade missions organized by the Paris Chamber of Commerce and Industry in September; and the London and Birmingham Chambers of Commerce in March.
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235. Two Japanese delegations, one from Kobe and the other from Nagasaki, visited Hong Kong in June and October respectively.
TRADE COMPLAINTS
236. A little known, but far from unimportant, section of the Trade Development Branch's activities is concerned with trade complaints. For the first time, statistics for trade complaints are included in an appendix (Table 4) to the report.
237. The number of commercial disputes in which the department is asked to mediate inevitably increases as trade itself and the number of visitors increase. 609 trade complaints were received from overseas firms or individuals compared with 558 received during the previous year. The largest single categories of overseas trade complaints again related to non-delivery and outstanding debts. Over 75% of all complaints received were amicably settled after intervention by the department.
238. Far and away the largest number of complaints originate in the United States, a reflection largely of the volume of trade, but also of the number of visitors from that country who are perhaps unduly con- fiding, hasty or careless in making a bargain with shopkeepers.
239. Ninety-three local firms sought the department's assistance in obtaining settlement of their claims with overseas countries.
TRADE ENQUIRIES
240. A total of 3,299 written trade enquiries, covering a very wide range of products, were received from overseas businessmen during the year. Prominent among the countries from which they came were U.S.A., Britain, Canada, Australia and West Germany.
241. After long deliberation by the Trade and Industry Advisory Board, a new system of handling trade enquiries, involving major trade and industrial associations, and the Exchange Banks Association, was experimentally inaugurated in January 1965. The system was designed to overcome the difficulties encountered as a result of the department's difficulty in discriminating between Hong Kong suppliers. Under the new system certain categories of trade enquiries received by the department were passed on a rotational basis to the several associations who were in a position, with propriety, to select a short list of suitable suppliers from among their members. Other categories were dealt with by the Branch as before.
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COMMERCIAL PUBLIC RELATIONS CO-ORDINATING COMMITTEE
Working Committee on Export Promotion Organization
242. The active interest of the Hong Kong General Chamber of Commerce and the Federation of Hong Kong Industries in creating a favourable climate of opinion towards Hong Kong industry and its products led to the provision in 1962 of public funds, for an experimental period of two years, to finance activities of this kind, and the two associa- tions formed a Public Relations Joint Committee for planning purposes. To avoid duplication of effort between the work of this committee and the department's activities in the field of export promotion, a Commercial Public Relations Co-ordinating Committee was appointed at the same time with the following terms of reference:
(i) to co-ordinate broad priorities in the use of public and private
funds for commercial public relations;
(ii) to co-ordinate recommendations as to the amount, source and
distribution of public funds for this purpose;
(iii) to examine and evaluate reports on the use of funds in relation
to specific projects; and
(iv) to recommend, in the light of experience, and not later than two years hence, whether any other organization should be established to advise on commercial public relations generally and, if so, what should be its terms of reference.
243. The Committee, under the chairmanship of the Director of Commerce and Industry, comprised the Chairman of the Federation of Hong Kong Industries, Dr. the Hon. Sir Sik-nin CHAU, C.B.E., J.P., the Chairman of the Hong Kong General Chamber of Commerce, the Hon. G. R. Ross, J.P. (The Hon. S. S. GORDON, J.P., represented the Hong Kong General Chamber of Commerce on several occasions during the absence of the Hon. G. R. Ross, J.P.) and the Director of Information Services, Mr. N. J. V. WATT. Since its inception the Committee has held regular monthly meetings and, during the year, received verbal reports from Mr. H. D. M. BARTON, M.B.E., representative of the Public Relations Joint Committee in Europe and Mr. K. T. Woo, its represen- tative in the United States, on the Joint Committee's activities in these areas. Among other matters considered were the Lausanne and Tokyo trade fairs; proposals for department store displays in Britain; arrange- ments for displays of Hong Kong products in selected stores in the United States; the issue of trade promotional films and literature; a
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professional survey of exhibition hall and convention centre facilities; and arrangements for receiving visiting trade missions.
244: The Committee's energies were however largely concentrated on producing the report required of it under its fourth term of reference, and this was finished in September 1964 and forwarded to the Colonial Secretary. The report reflected a growing conviction that Hong Kong should use the relatively scarce resources available for trade promotion to better effect by central programming and pooling of services, and suggested the appointment of a Working Committee to examine the idea of a central export promotion organization. The report also rec- ommended that the terms of reference of the Committee be amended to read 'to co-ordinate plans and activities designed to create overseas a favourable image of Hong Kong's commercial and industrial economy'. The report was accepted by the Governor in Council in January.
245. Arising from the recommendations contained in this report, the Governor in March appointed a Working Committee under my chairmanship having as members the Chairmen of the Hong Kong General Chamber of Commerce, the Federation of Hong Kong Industries and the Hong Kong Tourist Association; the President of the Chinese Manufacturers' Association; three representatives of the Trade and Industry Advisory Board; the Director of Information Services; the Deputy Economic Secretary; and two departmental officers. The Working Committee was given the following terms of reference:
(i) to review the present organizational structure for trade promotion in the broadest sense with a view to assessing its flexibility and effectiveness and the need for new measures particularly to avoid duplication of effort;
(ii) to examine methods employed by other countries to promote trade and to suggest what lessons for Hong Kong may be learned from them;
(iii) to recommend and report by 1st October, 1965 whether a new institutional framework is desirable or essential to provide central direction and conduct of Hong Kong's export promotion pro- gramme on a continuing basis and, if so, to suggest its composition, functions, powers and legislative and financial framework.
I announced the appointment of this Committee on 25th March in the Legislative Council.
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EXPORT CREDITS INSURANCE
246. In recommending the introduction of a scheme of export credits insurance in Hong Kong, the Working Party which considered this subject in 1963 suggested that application should be made to the British Export Credits Guarantee Department for the secondment of an ex- perienced officer for a two-year period to be responsible for advising, introducing and operating the Colony's scheme. Because of pressures on their own staff, the E.C.G.D., helpful though they had been with general advice and assistance, was understandably unable to accede to this particular request, but did agree to make available one of its senior officers for two months to undertake the more limited exercise of advising the department on the form and scope of a viable scheme for Hong Kong, the qualifications needed for its key staff, and how they might be engaged.
247. Mr. R. A. FREEMAN arrived in the Colony at the beginning of October and a programme of discussions with Government, banking, merchant and industrial interests was arranged for him by the department. Mr. FREEMAN left at the end of November, having prepared a report on his findings. He confirmed that the scheme already approved in principle was by and large practicable, but advised that it be established within the framework of a separate corporation and not, as recommended by the Working Party, as a branch of the Commerce and Industry Department. Mr. FREEMAN advised that the powers and the responsibility of the Corporation be vested in a single person advised by a council of prominent businessmen and bankers.
248. These proposals were accepted in principle by the Government in December 1964 and steady if unspectacular progress was made by the department during the succeeding months on the work involved in their implementation. As was expected, the finding of suitable key personnel for the proposed Corporation was difficult, but by the end of the year under review arrangements were in view which seemed likely to ensure the introduction of the scheme by the summer of 1966.
VIII. TRADE PUBLICATIONS BRANCH
TRADE BULLETIN
249. The aims of the monthly Trade Bulletin include overseas pro- motion of Hong Kong products; projection of a favourable image of Hong Kong's economy; publicizing Hong Kong's service industries
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and interesting overseas businessmen in the possibilities of setting up manufacturing operations in Hong Kong. The part which it plays in thereby promoting Hong Kong trade is reflected in the increased cor- respondence received during the year from overseas firms and business- men wishing to receive the publication. 2,004 names were added to the mailing list; as a result, circulation at the end of March 1965 was in the region of 20,000 copies a month. While the majority of these are sent free of charge to firms and businessmen overseas interested in trading with Hong Kong, domestic subscriptions and sales have also continued to increase.
250. The overseas trade enquiries section, which appears as a supple- ment to the local edition of the Trade Bulletin, is well patronized by overseas businessmen and over sixteen hundred enquiries were published during the year.
251. Regular feature articles continued to emphasize Hong Kong's quality products and high standards of workmanship and to introduce new products to overseas buyers. Two new series made their appearances in the Bulletin during the year. One, on service industries, consisted of articles contributed by Hong Kong businessmen and other people well- known in commercial circles and dealt with those industries whose invisible earning are an important part of Hong Kong's livelihood. The 'Bulletin Notebook' series provided information on visits of overseas businessmen and delegations of potential commercial importance which it had not been possible, due to limited space available, to cover in full length articles. The Bulletin Notebook also contained items of domestic news considered of interest to overseas readers.
252. Four additional pages of colour advertisements were introduced with the July Trade Bulletin. They were placed so as to relieve the con- centration of black and white advertisements in the front and back of the magazine.
253. The demand for space in the Bulletin for black and white advertisements was such that all available space was fully booked several issues ahead of printing. The average revenue from advertisements during the year was $33,860 an issue, compared with $28,212 for the last year.
254. The department acknowledges the help given by the Information Services Department, commercial studios and photographers who have provided photographs throughout the year, often at very short notice.
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The technical advice and co-operation of the two printers have continued to be invaluable.
COMMERCE, INDUSTRY AND FINANCE DIRECTORY
255. Twenty-six thousand copies of the 1964 edition of the Commerce, Industry & Finance Directory were distributed free of charge to overseas firms and businessmen, to airlines, shipping companies, trade travel associations and to British Embassies and Consulates. About 1,000 copies were sold locally.
256. Compilation of the text, selection of the cover design and examination of artwork for all advertisements for the 1965 editions were completed at the close of the year under review and selection of photographs was in its final stages.
257. The department wishes to acknowledge the co-operation received from other departments, firms and individuals who assisted in revising and rewriting the text. The department is also grateful to the printers for their helpful advice and support.
OTHER PUBLICATIONS
258. The branch distributed copies of 'Hong Kong for the Business- man', ‘Joint Venture Hong Kong', ‘Opportunity Hong Kong', 'Display Centre of Hong Kong Products' and five sets of 'Hong Kong Products' pamphlets. These publications were prepared by the Information Services Department largely from material supplied by the department. Appro- ximately 16,000 copies of the 'Hong Kong Products' pamphlets were sent overseas to British Embassies and Consulates, Chambers of Com- merce, and private firms interested in trading with Hong Kong.
IX. OVERSEAS OFFICES
THE LONDON OFFICE
General and Office Accommodation
259. The work of the London Office continued to increase as more people became aware of its existence and the services it offered. As a result plans had to be made to extend the accommodation available by taking over the adjacent premises at 55/58 Pall Mall, to house a Trade and Information Centre. By the end of the year contractors had been appointed and were ready to start work.
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260. Regular window displays at 54 Pall Mall (the existing office) featured the following subjects during the year: the Hong Kong Police Force, Education in Hong Kong, Hong Kong 1963, and the Central District Development Plan.
Trade Relations
261. The Office has continued to play an important part in interna- tional negotiations affecting Hong Kong trade.
262. It was involved in talks with the French Government on import quotas of Hong Kong products and with the West German authorities on the imports of woollen textiles from Hong Kong, in talks with the Italian Ministry of Foreign Trade following the imposition of restrictions on the import of certain cotton textile fabrics and in discussions with the Nigerian Minister of Commerce and Industry about Nigerian import licensing restrictions.
263. Close co-operation with the Board of Trade on the operation of the Textile Agreement with Britain and in connexion with arrangements for renewal of the existing arrangement was maintained throughout the year.
264. Discussions were also held during the year with officials of the Colonial Office and the Board of Trade on various matters of policy, notably the effect on Hong Kong industry of the imposition of a 15% surcharge on imports into the United Kingdom.
265. Every assistance was given to the members of the Hong Kong Government who participated in these talks, as well as to officials and unofficials attending other conferences and courses in Europe.
Trade and Industrial Promotion and Public Relations
266. Discussions were held at the Home Office about safety standards in connexion with flame proofing of children's nightwear and the lead content of plastic toys. Both subjects had been featured in the British press.
267. Many discussions were held with United Kingdom manufac- turers on the possibilities of establishing joint manufacturing ventures in the Colony. Where company representatives were subsequently sent out to the Colony to investigate these possibilities more fully, letters of introduction were provided. Relevant information was given to British buyers going out to the Colony for the first time in order to enable them to make the most of what is an expensive trip.
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268. Mr. K. T. Woo and Mr. James MARTIN spent periods of up to 14 days in the London Office, before proceeding to set up their own offices. Mr. Woo has since established an office on behalf of the Federation of Hong Kong Industries and the General Chamber of Commerce in New York and Mr. MARTIN has subsequently taken up his duties as Director of the Hong Kong Government Office in Brussels.
269. Trade enquiries during the year numbered about six thousand as compared with 4,843 in 1963–64. On the recommendation of chambers of commerce and other interested organizations throughout the British Isles, an encouraging number of businessmen have come to London solely to see the display of Hong Kong products and to discuss ways of increasing their own turn-over by importing goods from Hong Kong.
270. The number of letters written by H. M. Customs and Excise to Hong Kong accountants about claims to Preference totalled 2,766. This decline reflected the cautious attitude of British buyers after the imposition of the 15 per cent surcharge on imports in October 1964, which was still in force on March 31st, 1965. The re-export of Hong Kong goods from Britain, which was not of course affected by the 15 per cent surcharge on imports, continued to increase. The publication, of 'Opportunity Hong Kong', a review of industrial and commercial achievements and opportunities in the Colony illustrated in full colour, was of great assistance to the trade promotion activities of the Office. Copies were widely distributed and received favourable press reviews. Following the General Election in October 1964, copies of ‘Opportunity Hong Kong' and the 1964 C.I.F. Directory were sent to the 136 new Members of Parliament. A set of five Hong Kong products booklets, in five languages, also published during the year, made a welcome addition to the stock of commercial literature available for distribution. The popularity of the Trade Bulletin increased, many more firms being added to the regular mailing list from Hong Kong.
271. The Office investigated 34 claims by British importers against Hong Kong suppliers and eleven by Hong Kong suppliers against im- porters in Britain. With the assistance of the department, solutions were found in the majority of cases.
272. The London Office was represented at five meetings of the Hong Kong Association. The Association also gave a luncheon in honour of Mr. E. G. A. GRIMWOOD.
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Exhibitions
273. Proposals were submitted to the Commerce & Industry Depart- ment for an exhibition of the Colony's products at the Bull Ring Centre, Birmingham, to be followed by a series of 'Hong Kong Fortnights' in large provincial centres throughout Britain starting in July 1965 and finishing in April 1966. These 'Fortnights' are designed to give the public a general picture of Hong Kong's manufacturing capabilities and at the same time to acquaint them with some of the Colony's problems and achievements. The proposals were approved and detailed plans drawn up in conjunction with the department, the Federation of Hong Kong Industries and the General Chamber of Commerce and the Hong Kong Tourist Association.
Public Relations
274. Press relations form an important part of the work of the London Office, and press releases are prepared from the Daily Information Bulletins. Major news items, however, are despatched by press cable from the Information Services Department and these are processed immediately and passed on to the London newspapers and principal news agencies. Many of the 238 press releases issued during the year were utilized by the press.
275. Twenty British Press Surveys, a digest of what the British Press is saying about Hong Kong, were issued. This Survey is sent to some 150 organizations and businessmen in the United Kingdom and is also redistributed by the Information Services Department in Hong Kong to interested parties in the Colony. It also provides background material for a monthly programme for the BBC Chinese Service on British press comment about Hong Kong.
276. The Information Section is also the sole distributing agency in Britain for photo-features prepared by the Information Services Department. These, together with press releases, are the basis of a continuing effort to inform the British public about Hong Kong and its achievements, through the media of the newspaper and magazine press.
277. Distribution of editorial and photographic material received from the Information Services Department during the year resulted in prominently displayed features in more than twenty magazines with widely varied interests.
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278. Much assistance was given to the editorial staffs of THE STATIST, THE CONSULTING ENGINEER and the GUARDIAN, the ECONOMIST, COURIER and CITY PRESS in the preparation of special supplements devoted to Hong Kong.
279. The Information Section has built up a stock of several thousand black and white photographs and colour transparencies and subjects are regularly brought up-to-date by the Information Services Department. These photographs were in constant demand for reproduction by news- papers, magazines and publishing houses, as well as by free-lance jour- nalists, lecturers and commercial publicity organizations. They were also made available to artists, film studios and television companies for reference.
280. During the year, the Information Section collaborated closely with the Information Services Department on the final editing, processing and recording of commentaries for Government Film Unit productions: 'Race Against People', 'Made in Hong Kong' and a revised version of "This is Hong Kong'.
281. The Information Section's Library was responsible for the sale in the United Kingdom of Hong Kong Government publications, in- cluding the Colony's Annual Report.
282. Other functions of the section included the distribution of literature produced by the Information Services Department, the Depart- ment of Commerce and Industry and other Government departments; briefing of journalists; arrangement of lectures by Government officers on leave; supply of films and colour slides, on loan; and the answering of many thousands of questions, by letter, telephone and personal visit, from members of the general public, business firms and schools.
283. The London Office, through its Information Section, maintained close contact with the Colonial Office Information Department and other Departments of H.M. Government, the Central Office of Informa- tion, Commonwealth organizations, the BBC and ITV and other agencies responsible for the dissemination of information.
284. There was also regular and effective liaison between the London Office and Messrs. Campbell-Johnson Ltd., the United Kingdom Public Relations Consultants of the Public Relations Joint Committee of the Hong Kong General Chamber of Commerce and the Federation of Hong Kong Industries, Mr. Michael PAGE of the Joint Committee's Brussels Office and Curtis Greensted Associates Ltd., the United Kingdom representatives of the Hong Kong Tourist Association.
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Visitors
285. With a large frontage on one of the principal streets in the West End of London, the number of casual callers greatly increased, bringing the number of visitors to the Office for the year up to nearly four thousand. The London Office is always pleased to receive Govern- ment servants on leave or official duty and other visitors and business- men from the Colony.
THE SYDNEY OFFICE
General
286. There was a continuing and increasing interest in Hong Kong as a source of supply of finished goods, exemplified by the opening of buying offices in the Colony by two of Australia's largest general retail chain stores. Australian manufacturers also indicated an increasing awareness of the Colony's potentialities as a source from which they could economically obtain components, semi-finished goods, and ancillary items such as packaging and merchandising materials. During 1964 imports from Hong Kong rose by 9% in comparison with 1963, exports to Hong Kong by 18%.
287. The Department was kept advised on these and other economic and commercial developments in Australia, and on import policies and Tariff Board enquiries. Liaison was maintained with Chambers of Commerce and other representative organizations throughout Australia.
288. The Trade Representative visited Canberra, Melbourne, Brisbane and Perth, and attended the annual conference in Melbourne of the Associated Chambers of Commerce of Australia in his official capacity.
Trade Enquiries, Commercial Introductions, etc.
289. 923 trade enquiries covering a wide range of products were received, and 764 commercial introductions effected; these figures showed a marked increase over the previous year. 110 Australian businessmen consulted the Trade Representative prior to visits to the Colony, and advice was given to 204 Hong Kong firms seeking entry into the Aus- tralian market.
290. 105 complaints against Hong Kong merchants were dealt with. These mainly concerned goods not in accordance with sample or failure to reply to correspondence, and in most cases, with the assistance of the department, a satisfactory and amicable settlement was achieved.
61
Publications and Public Relations
291. The Commerce, Industry and Finance Directory and Trade Bulletin continue to be well regarded in Australia, and have proved a useful medium in maintaining contact with merchants, and in breaking new ground. During the year considerable emphasis was placed on pub- licizing the Trade Bulletin and the services offered by the Sydney Office, mainly by the issue of circular letters to selected importers. Over 1,900 Australian addressees now receive the Trade Bulletin regularly. The dis- tribution of more than 500 information pamphlets concerning partici- pation in the Colony's industries by way of joint ventures gained a marked response.
292. Fact Sheets and booklets on Hong Kong were issued to satisfy the constant demand from teachers and pupils for material for school projects on the Colony. Talks and Hong Kong film shows were given by the Representative to a variety of audiences. Hong Kong posters, products and other materials were issued or loaned in response to requests for a Colony background for publicity projects conducted in stores, schools, etc., and many general enquiries on all aspects of life in the Colony were dealt with.
Staff and General
293. During the absence of Mr. W. E. MANSON on overseas leave between June and November 1964, the office was in the charge of Mr. G. T. HOLE, who had retired from the department as Assistant Director in 1962.
294. An Assistant Trade Officer arrived in February to assume duty in the post of Assistant Trade Representative, created in 1963, but hitherto unfilled because of staffing difficulties.
295. At the end of the year the staff of the Sydney Office consisted of the Trade Representative, his assistant mentioned above, together with one personal secretary and three stenographer/clerical assistants engaged locally.
X. TRADE LICENSING AND SUPPLIES BRANCH
TRADE LICENSING
296. There were no changes in import or export licensing regulations during the year. The Licensing Section was much occupied with adminis- tration of the Importation and Exportation (Prohibition) (Strategic Commodities) Regulations 1959 in connexion with certain exports to Indonesia.
62
297. The number of import licences issued for all purposes, including controls on strategic goods, reserved commodities (e.g. rice) and in respect of currency and health regulations, was 20,602 (19,368).
298. 92 (44) delivery verification certificates were issued to confirm the arrival in Hong Kong of highly strategic goods.
299. Most of the export licences issued by the Licensing Section are for exchange control purposes. Total licences issued (excluding a large proportion of textile licences processed in the Textiles Branch) numbered 457,420 (396,377).
300. Licences covering exports of highly strategic goods require the production of delivery verifications and/or landing certificates issued by the authorities of importing countries; 582 (631) were supplied by exporters during the year.
SUPPLIES
301. Certain essential food and fuel supplies are subject to licensing, and to a limited degree of control, under the Import (Reserve Commodities) Regulations 1955, administration of which is undertaken by the branch. During the year, the department liquidated such few remaining stocks of foodstuffs as it held.
Rice
302. Existing arrangements continued without modification during 1964. The basic quarterly import quota remained at 88,000 metric tons, and the stock-holding commitment at 44,000 metric tons. The working stock level was, as usual, considerably higher.
303. Rice imports during 1964 were 348,727 (377,248) metric tons as follows:
Source Thailand
China ... Cambodia S. Vietnam N. Vietnam Pakistan
Australia
...
Burma Timor...
Jan.-Dec., 1964 M/Tons
Jan.-Dec., 1963
%
M/Tons
%
195,597
56.1
184,968
49.0
***
83,462
23.9
92,591
24.5
...
48,817
14.0
29,093
7.7
6,962
2.0
50,781
13.5
10,708
3.1
8,132
2.2
1,477
0.4
8,935
2.4
1,704
0.5
1,623
0.4
609
0.2
516
0.1
348,727
100.0
377,248
100.0
Thailand, China and Cambodia increased their respective percentage share of the market at the expense of South Vietnam which, affected by
63
M/T
..
the unstable political situation and natural calamities, had to restrict exports of rice.
304. Local wholesale rice prices remained remarkably stable through- out the year. Adequate supplies to consumers were maintained. Offtakes from stocks were as follow:
Type
Thai 100% whole rice
Thai whole rice
1964
1963
%
MIT
%
95,204
26.2
68,011
18.5
46,239
12.7
36,536
10.0
Thai broken rice
...
Thai other rice
48,598
13.4
58,796
16.0
14,048
3.9
12,719
3.5
204,089
56.2
176,062
48.0
China whole rice
81,439
22.4
95,187
26.0
China paddy rice
68
81,439
22.4
95,255
26.0
Cambodia whole rice Cambodia other rice
37,413
10.3
18,223
5.0
...
9,712
2.7
6,625
1.8
47,125
13.0
24,848
6.8
S. Vietnam whole rice
S. Vietnam other rice
11,169
3.1
36,689
10.0
::
4,475
1.2
8,781
2.4
15,644
4.3
45,470
12.4
N. Vietnam whole rice
N. Vietnam other rice
9,352
2.5
7,199
2.0
677
0.2
81
10,029
2.7
7,280
2.0
Other sources whole rice Other sources other rice
..
4,789
1.3
14,997
4.1
279
0.1
2,755
0.7
5,068
1.4
17,752
4.8
Total offtakes:
363,394 100.0
366,667
100.0
305. In March 1965, rice wholesalers raised their mark-up for rice sold to retailers from 80 cents to $1.50 a picul; this increase, closely following an increased mark-up in October 1964 from 30 cents to 80 cents a picul, aroused considerable public interest. The reasons for at least the second increase were of doubtful validity. There was no significent
64
corresponding increase in retail prices, the retail mark-up being of course much higher and the higher purchase price was readily absorbed by fractional reduction in quality.
Frozen Meat
306. Imports of frozen meat, under licence but not otherwise control- led, amounted in 1964-65 to 19,665 (14,970) long tons. 73.1% of imports came from China, which is also the most important source of fresh meat. U.S.A. and Australia are the only other significant suppliers of frozen
meat.
307. Consumption of frozen and fresh meat during the past three years has been as follows:
Fresh meat
Frozen meat
1962-63
1963-64
(L/Tons)
(L/Tons)
1964-65 (L/Tons)
83,343
90,901
101,757
10,460
14,644
19,945
93,803
105,545
121,702
Increase in consumption of meat continues to outstrip the rate of increase of the population. The proportion of frozen to all meat consumed also continues to increase.
Accounts of Government Stocks
308. Net receipts on the maintenance and turnover of Government stockpiles for the year were $1,606,852 being the difference between the proceeds of sales and the original cost of purchase, storage, etc. After revaluation of stocks at 31st March, 1965 on the basis of the market value or original landed cost, whichever was the lower, the net loss for the year was $165,740.
XI. DUTIABLE COMMODITIES BRANCH
REVENUE FROM EXCISE DUTIES
309. The total net revenue from duties and licence fees during the financial year 1964-65 was $258,821,767, an increase of 13.4% (13.1%) over the previous financial year's $228,284,112. Revenue from each dutiable commodity exceeded that for previous years.
65
310. Comparison with previous years are summarized to the nearest thousand dollars in the table below:
Tobacco
Hydrocarbon Oils
Liquor
Table Waters
Methyl Alcohol
...
:
$ '000
1962-63
1963-64
1964-65
84,994
93,314
101,184
58,321
65,227
75,816
51,604
61,506
71,843
5,009
5,414
6,328
16
33
54
199,944
225,494
255,225
A full breakdown of gross collections, together with refunds and drawback payments, is recorded in Table 6.
Tobacco
311. Net duty collected from tobacco, the principal source of excise revenue, reached $101,184,068 ($93,314,242), an increase of 8.4%.
Hydrocarbon oils
312. Net revenue from hydrocarbon oils amounted to $75,816,341, an increase of 16.2%. Revenue from light diesel oil used by road vehicles other than public omnibuses rose by 54.8%. More diesel taxis and public cars, coupled with more successful preventive measures against unlawful use of industrial diesel oil in motor vehicles, were responsible for the increase.
Liquor
313. Net revenue from intoxicating liquors totalled $69,571,230, an increase of 16.2%. All types of liquor, with the exception of locally manufactured Chinese-type spirits, yielded increased revenue. Collections from imported Chinese-type spirits increased by $3,381,596 or 44.8%, contrasted with a drop by $666,855 or 4.4% for the locally manufactured counterpart. Brandy, beer and whisky also showed increases by $3,417,336 or 23.7%, $2,690,836 or 24% and $1,077,456 or 16.2% respectively.
Table waters
314. Removal of restrictions on water supply and higher consumption of bottled soft drinks pushed collections from table waters up by $913,500 or 16.9% against 1963-64's increase by $404,661 or 8.1%.
66
REVENUE FROM LICENCES
315. Details of types of licences and revenue collected therefrom are recorded in Table 7 and summarized below by dutiable commodity, rather than by type of licence. Revenue from licences increased by 28.9%, compared with 42.7% in previous year.
:
Liquor
Tobacco
Hydrocarbon Oils
Table Waters
...
Ship and Harbour Vessel
Methyl Alcohol
...
1962-63
1963-64
$ '000 1964-65
1,425
2,060
2,582
461
604
786
61
112
196
6
11
27
...
1
2
5
1
1
1
1,955
2,790
3,597
XII. PREVENTIVE SERVICE
GENERAL
316. The Service continued its law enforcement duties as prescribed in the Preventive Service Ordinance (enacted last year) and in the other ordinances under which import and excise duties are imposed on tobacco, liquor, hydrocarbon oils, table waters and methyl alcohol, and which control the limited importation and exportation requirements of the Colony. Co-operation also continued with the Narcotics Bureau of the Police in measures aimed at preventing the smuggling of narcotics into and out of Hong Kong, which resulted in a number of important seizures being made during the year.
317. Re-organization of the section of the force which carries out inspections of factories and goods for export was undertaken during the last few months of the year under review, prior to the transfer of its responsibilities to a new branch of the Textiles and Certification Division.
318. All six cruising launches continued to operate under the opera- tional control of the Police in support of anti-illegal immigration operations, but launches were returned to the Service from time to time for specific anti-narcotics duties.
67
ORGANIZATION
319. A major reorganization of the Preventive Service was authorized by the legislature in May 1964. It took cognizance of the considerable growth of the Service since World War II, and particularly of the fact that, since 1958, when the last major reorganization was effected, the establishment has almost doubled. The new senior command structure, which was the principal feature of the reorganization, has enabled more effective operational supervision to be given to the work of revenue protection, prevention of narcotics smuggling and enforcement of trade controls; it involved, inter alia, the creation of 4 posts in a new rank of Chief Revenue Inspector.
TRAINING
320. Induction courses were conducted for twenty-one Revenue Sub-Inspectors, twenty-three Assistant Revenue Officers and three Woman Assistant Revenue Officers during the year.
321. Six Revenue Sub-Inspectors received training on their promotion from the ranks.
322. Refresher courses were conducted for Assistant Revenue Officers during the year. These courses, which were conducted in Chinese, proved to be highly successful.
323. During the year nine members of the Inspectorate attended Extra-Mural Courses sponsored by Hong Kong University.
324. One Revenue Inspector was awarded a Merit Trip to the United Kingdom. During the trip he was attached to H.M. Customs and Excise for three months.
325. Two Customs officers from Sabah and two from Aden were attached to the Preventive Service for field training.
326. The appointment of a Training Adviser was approved during 1964 and recruitment procedures were in train at the end of the year; the task of this officer will be to survey the whole field of the Preventive Service's future training requirements and advise on the most appropriate means of meeting them.
STAFF AND DISCIPLINE
327. One Revenue Inspector and twelve other ranks resigned from the Service. Three Revenue Sub-Inspectors and one Assistant Revenue
68
Officer transferred to other departments of Government. One Assistant Revenue Officer was dismissed.
328. Three Revenue Inspectors and nine other ranks received Com- mendations or favourable entries in their Record of Service files.
329. Punishments were awarded as follows:
Admonishments
Reprimands
Severe reprimands
...
Deferments of increment...
Fines
Dismissals ...
1963-64
1964-65
2
562 N -
125
1
4
...
...
...
SEARCHES
330. Preventive Service officers searched 1,281 (846) ocean-going vessels within the harbour, and launch crews searched 15,606 (19,272) native craft for narcotics, dutiable commodities and illegal immigrants. Mobile patrols continued their checks of fishing vessels and motor trading vessels on the waterfront and at Aberdeen. The hydrofoil services to Macau, which started operations towards the end of last year, continued to expand both in the number of vessels and in the number of passengers carried. To cope with the expansion new facilities were provided at the waterfront by the operating companies for the examination of passengers and baggage.
331. Preventive Service launches steamed a total of 13,331 (12,008) hours and patrol vehicles covered a total of 177,610 (205,379) miles. At the Lowu Border Station the numbers crossing the border continued to rise; persons passing through the baggage examination hall over the last three years being 358,794 in 1962-63, 637,288 last year and 854,316 persons this year. Large increases were also recorded in arrivals from Macau; the relevant figures for the past 3 years being 645,000, 680,175 and 863,208. The rapid growth in arrivals from Macau is attribut- able to the expansion of the tourist trade there, which has been stimulated by the rapid transit provided by the hydrofoils, and the development of tourist amenities, attractions and diversions in the Portuguese Colony. Preventive Service officers at Kai Tak Airport examined 22,816 (22,415) items of freight, and 3,950 (1,197) packages were detained for payment of duty. 9,440 (2,641) aircraft were checked during the period. A total of 398,171 passengers were processed.
69
332. Pressure was maintained to check abuses in the use of industrial diesel oil in road vehicles. Over 3,600 (2,000) vehicles were inspected, resulting in the seizure of 1,489 (1,527) gallons of industrial diesel oil.
333. Of the 224 stills seized from illicit distillers, many were of a sophisticated type involving the use of elaborate condensers and burners. Much of the fermenting material destroyed was made from sugar or molasses, materials which have a comparatively short fermentation period. Seizures of stills were well below the previous year's total of 499, because, with the break in the drought experienced during the previous 2 years, which had confined stills to the few remaining and easily detectable water courses, the illicit distillers moved to remoter areas of the Colony where water was again available. Other contributory factors were the large number of distillers who had gone out of business because of the water shortage and the use of more elaborate types of stills with a higher production rate.
334. The majority of ocean-going vessels arriving in the Colony were checked to prevent landing of dutiable ship's stores.
335.
NARCOTICS
Close liaison was maintained between the Preventive Service and the Police Narcotics Bureau in the drive against narcotics importers and traffickers. Harbour rummaging parties increased their activities to combat narcotics smuggling. A total of 1,281 vessels were rummaged during their stay in the Colony. This resulted in a total of 252 separate seizures of narcotics drugs.
336. The largest single seizure of drugs was made on board the s.s. 'Muda Mas' on arrival from Singapore in June. During a routine search of the engine room, 263.75 lbs. of raw opium were found concealed in eight kerosene tins in a lubrication oil tank; a crew member was arrested, subsequently charged with importing, possession and conspiracy and was sentenced to a total of ten years' imprisonment.
337. Another important seizure was made on board m.v. 'Asia' in July on arrival from Singapore. A routine search of this vessel revealed two abandoned suitcases containing 78 lbs. of morphine hydrochloride in the tourist passenger accommodation.
338. Twenty-one pounds and fourteen ounces of diacetylmorphine hydrochloride were found, together with other drugs, in a bilge tank on the L.S.T. ‘Empire Kittywake'.
70
339. Officers at the Airport found 22.125 ozs. of morphine hydro- chloride secreted in the underwear of a woman passenger on her arrival from Bangkok. She was subsequently charged and sentenced to three years' imprisonment.
340. Seizures of diacetylmorphine hydrochloride totalled 74.84 lbs., an increase of 56.28 lbs. over the previous year.
MERCHANDISE MARKS ORDINANCE
341. The Preventive Service took action on four cases of infringements of the Merchandise Marks Ordinance during the year. Articles seized were cutlery, watches, shirts and printing blocks.
BULLION
342. Seizures of gold totalled 421 lbs., an increase of 147 lbs. compared with the previous year. Three important seizures of gold were made in March 1965. Two Swiss men arriving from Europe by air were each found to be carrying 38 bars of gold, with a total weight of 170 lbs., concealed in specially designed under garments. An immediate follow-up resulted in the arrest of a Swiss woman who was found to have brought into the Colony a further 66 lbs. of gold. The total value of these seizures amounted to $820,000. All three persons were convicted and sentenced to 6 months' imprisonment. The third seizure was made when a 27 year old Briton was arrested on arrival from Bangkok. He was found to have 40 gold bars concealed in a specially designed undervest; a further 6 were concealed in a secret compartment in his suitcase. The total weight of this seizure was 101 lbs., valued at $322,000.
343. Action for condemnation of the gold seized in the three cases mentioned above was still pending at the end of the year under review.
EMERGENCY (AGRICULTURAL POISONS) REGULATIONS
344. Preventive Service officers seized a total of 107,409 c.c. of agricultural poisons during the year, mostly at the General Post Office and on vessels arriving from Taiwan.
COURT ACTIONS
345. The number of court actions for the year was 2,566, an increase of 576 over the previous year. 1,200 arrests were made, a significant increase on last year's figure. During the year a further three courts
71
were opened, necessitating an increase in the prosecution staff. The following table illustrates trends in recent years:
Actions Arrests Fines
...
...
1962-63 2,465
1963-64 1,990
1964-65
2,566
543 $516,846
856 $206,522 $212,036
1,200
Details of major confiscations ordered by the Courts are given in Table 9 and of dutiable commodities and dangerous drugs in Table 8.
XIII. STATISTICS BRANCH
GENERAL
346. The Statistics Branch is responsible for compiling the Colony's trade statistics, the classification of which is based on the United Nations Standard International Trade Classification (Revised).
347. For the monthly Statistical Supplement to the Government Gazette, the Branch has continued to collect returns from public companies and other Government departments. To this Supplement were added two new tables showing Hong Kong's trade with countries of the British Commonwealth and one other table on petroleum products analysed by local consumption, ships/aircraft stores, and re-exports.
348. The two surveys undertaken for the Cost of Living Review Committee on household expenditure, and movements in the cost of living were completed during the year. From the information obtained a new Consumer Price Index was compiled which will continue in parallel with the long established Retail Price Index.
349. The Branch has continued to give statistical information and advice to other branches of this department, to other departments and to a large number of outside concerns throughout the year. Data pro- cessing facilities were made available to several departments either on routine or ad hoc basis.
Classification
TRADE STATISTICS
350. A number of amendments effective from January 1965 was made to the 1964 edition of the Hong Kong Imports and Exports Clas- sification List. The amendments mainly relate to the newly independent African countries and the woven cotton fabrics group of commodities. A separate list of amendments was printed for the benefit of the holders
72
·
of the 1964 Edition of the Classification List. A revised edition incor- porating the amendments was published in January 1965. An exercise was completed in June 1964, reconciling the code numbers of commodity items included in the Imports and Exports Classification List (Revised Edition, 1964) with those in force in the previous years since 1959.
Trade Declarations
351. A total of 973,513 (909,034) import, export and re-export declarations was received during the year ending 31st March, 1965. Of the above total, 65,475 (49,148) declarations were collected through the Kowloon Office of the department. Classified by type of declarations, the figures are as follows:
Imports Exports
...
Re-exports...
1963-64
1964-65
...
...
...
400,019
427,532
394,415
426,627
114,600
119,354
352. Some importers and exporters failed to submit their declarations within the prescribed time limit and this resulted in a total of 129,086 (105,347) reminders being sent during the year. Queries about incorrect details given on declarations and cargo manifests totalled 54,986 (38,983). 353. Details of revenue collected for the services provided by the branch during the year ending 31st March, 1965, with comparative figures for the previous year, are shown below:
1964-65 $
Stamp duty on declarations
Fees for landing certificates
Fees for statistical information Fees for endorsements
...
Total ...
..
...
1963-64 $ 1,818,068
1,947,026
10,100 8,227
12,490
8,813
4,030
3,510
1,840,425
1,971,839
354. Enquiries made to the Trade Statistics Section about Hong Kong's trade in certain commodities or with certain countries, classifica- tion numbers or the published statistics, and requests for special statistics continued to be received. The number of personal enquiries received by the section during the year was approximately 6,500 and in addition 453 written enquiries were received of which about 80% related to un- published information.
355. Ships' cargo manifests received during 1964-65 numbered 48,989 (48,663).
73
Parcel Post Statistics
356. The present method of collecting parcel post statistics is that merchants are requested to complete voluntarily each month a return on a simple form indicating the total number and total value of packages they have imported or exported through the post during the previous month; only commercial transactions are required. Although efforts were again made during the year to encourage merchants to complete these returns, the response rate has declined as is shown by a comparison with the records kept in this Office with the recorded total number of parcels exported and imported through the Post Office.
357. A total of 577 (642) returns was received during 1964–65. The number and value of parcels declared were as follows:
Despatched:
Number of parcels
...
Value ...
Received:
Number of parcels
...
Value ...
1963-64
1964-65
4,987 $3,674,266
5,502
$4,482,864
15,520
13,973 $9,461,354
$12,813,062
358. Where merchants, through usage or convenience, continue to record their postal transactions on import and export declarations forms, these are included in the Trade Statistics under the appropriate commodity and country classification. There is no classification of parcel post items into exports and re-exports, and parcels despatched are recorded in the trade statistics as exports.
RETAIL PRICE INDEX
359. The retail price index was calculated and published monthly. The figures for the end of each quarter on the basis of March 1947 = 100 were as follows:
4
Food
Rent
Clothing, including footwear
Fuel
...
...
Electric light
Cleaning...
Education
Tobacco and cigarettes
Doctor and medicines ...
Fares
June
Sept.
Dec. March
1964
1964 1964
1965
134
142
136
136
119
119
119
119
107
109
111
111
96
100
105
110
...
...
57
57
57
56
•
91
91
92
94
140
140
140
140
124
124
124
124
...
...
103
104
104
104
100
100
100
100
74
June
Sept.
Dec.
March
1964
1964
1964 1965
Household equipment...
128
130
131
131
Hairdressing
143
143
143
141
...
...
Newspapers and stationery
153
153
153
153
Shoe repairs
93
93
104
104
Rates
100
100
100
100
•
General Retail Price Index
125
130
127
127
360. The average for the year of the general retail price index was 127, a rise of three points from the average for the previous year. There was a peak of 133 in November 1964, the highest since 1951; and the lowest index during the year was 122 in April 1964. The continued rise of the R.P.I. from 125 in August to 130, 132 and 133 in September, October and November respectively was occasioned by price rises for foodstuffs after typhoons Ruby, Sally, Tilda and Dot. Price movements during other months were considered normal.
CONSUMER PRICE INDEX
Household expenditure survey
361. Field work in connexion with the survey which began in Septem- ber 1963 was completed in August 1964. A total of 2,793 households with a population of over 16,000 persons took part in the survey and each household provided a month's record of daily expenditures. The pattern of consumption expenditure of 2,727 households who spent between $100 and $1,999 a month, was used as the basis of weights for the nine main sections of commodities and services of a new Consumer Price Index.
362. In March 1965, the report on the survey was ready for publica- tion. Entitled 'The Household Expenditure Survey 1963-64 and the Consumer Price Index', the report describes the methodology of the Survey, its results, and the method of construction and calculation of the new Consumer Price Index.
363. During February and March 1965, preparations were under way for processing and analysing the results of similar surveys conducted by civil servants' associations during February 1965.
364. The Budgetary Survey Unit, having finished its work, was renamed the Consumer Price Index Section. The new section is now charged with the collection of prices for calculation of the C.P.I. on a monthly basis and the conduct of a series of continuous household
75
expenditure surveys on a smaller scale. The object of the continuous surveys is to improve the reliability of survey techniques and to adjust the weights for commodities and services included in the C.P.I. if results indicate that this is necessary.
The Index
365. The Consumer Price Index was established on the basis of weights derived from the results of the Household Expenditure Survey, 1963-64, with September 1963 to August 1964 as the base period (=100). The following table compares the weights used in the new index with those adopted for the Retail Price Index:
C.P.I.
R.P.I.
Adjusted
I. Foodstuffs, of which
Rice
•
II. Housing
III. Fuel and light
...
IV. Alcoholic drink and tobacco
V. Clothing and footwear
VI. Durable goods
VII. Miscellaneous goods VIII. Transport and vehicles
IX. Services, of which
+
...
·
...
...
Education
...
Weights
1963-64
Existing for strict
comparison
48.3
50.00
54.8
6.2
15.55
17.0
15.2
9.25
10.1
3.0
5.00
5.5
+
3.3
4.00
4.4
6.2
7.00
7.7
...
2.1
1.75
1.9
4.2
1.50
1.6
3.2
2.25
2.5
14.5
10.50
11.5
7.2
3.5
3.8
100.0
91.25
100.0
366.
Movements in the Consumer Price Index itself however did
not differ very greatly from those in the Retail Price Index as the com- parison below discloses:
September 1964
...
October 1964
November 1964
December 1964
January 1965
February 1965
March 1965
•
...
:
: :
...
...
C.P.I.
R.P.I. (adjusted)
109
104
:
:
106
106
102
106
99
102
...
99
101
100
102
101
102
367. The Consumer Price Index for a particular calendar month will in future be calculated within ten days of the succeeding month and published in the Statistical Supplement to the Government Gazette.
76
COST OF LIVING SURVEY, 1958-1963-64
368. During the final phase of the household expenditure survey a study was made on the extent of the fluctuations in the cost of living which occurred between the calendar year 1958 and the period from September 1963 to August 1964. The results of this study were published in the 'Cost of Living Survey, 1958 1963-64'.
-
369. In the absence of a 1958 expenditure pattern, the weightings used for 1958 were inevitably those derived from the 1963-64 household expenditure survey. The overall rise in the cost of living was estimated at 14%, the percentage increase/decrease for broad groups of commodities and services being as recorded below (weights in brackets):
Services
...
...
...
+ 28.9 (14.5) + 17.2 (15.2)
+ 13.3 ( 3.3)
+ 13.2 (6.2)
Housing
Alcoholic drink and tobacco
Clothing and footwear
Foodstuffs...
Miscellaneous goods
Transport and vehicles Durable goods
Fuel and light
...
+ 11.4 (48.3)
+ 4.3 (4.2)
+
2.8 (3.2)
+
2.4 (2.1)
6.7 (3.0)
...
...
...
INDUSTRIAL PRODUCTION STATISTICS
370. Pressure of other work so stretched an inadequate staff in 1963 that work on industrial production statistics fell seriously into arrears. Collection of returns was discontinued in the spring of 1964 and a decision was taken in the autumn to suspend work on the whole project pending review of its scope and methodology. This hard decision was taken with great reluctance in the knowledge that the work first begun in 1961 was of great importance, would be of special value to the proposed productivity organization, and constituted on that account alone a major set-back. Records have been put in cold storage, to be worked on when opportunity offers.
371. Quarterly returns continued to be collected from spinning and weaving mills registered with the department. The production figures of cotton yarn, cotton fabrics and woollen yarn were as follows:
Cotton yarn ('000 lbs.)
Woollen yarn
Cotton fabrics ('000 sq. yds.)
('000 lbs.)
1963
...
...
240,552
568,408
11,280
...
1964
260,913
579,187
12,255
...
1964:
1st quarter
60,030
127,907
2,907
2nd quarter
62,056
139,578
3,306
3rd quarter
66,598
149,164
3,022
4th quarter
72,228
162,538
3,020
77
RESEARCH
372. A new section was created with the object of preparing (at a fairly low level in the first instance) statistical material on the Colony's overseas trade and factors affecting it, in conjunction with the Overseas Trade Relations Branch and the Economic Information Centre. Routine work included supplying statistical information for use in organizing trade missions and negotiations, answering questionnaires from U.N. agencies and other international bodies, and collating basic economic statistics. During the year, exercises completed comprised a preliminary study of Hong Kong's labour force, a statistical study of the consumer market in Japan for local manufactured products, and Hong Kong's trade with specific overseas markets.
373. The staff of the Research Section have little experience at present. Their output will improve and be of better quality as they gain experience.
National Income Survey
374. The Research Fellow attached to the Hong Kong University, and financed from public funds to carry out a National Income Survey continued his work during the year and the branch gave him as much assistance as possible. By the end of the year, the report on the Survey was near completion.
DATA PROCESSING SECTION
375. Routine data processing matters dealt with in the machine room were trade statistics, industrial and occupational accidents, death statistics, market rent data, hawkers' licences, and meteorological reports. Ad hoc jobs included the dental treatment survey 1963, household expenditure survey 1963-64, business registration survey, traverses survey, conversion of rainfall data for the years 1884 to 1939 to metric numbers and investigation into the epidemiology of drug addiction. 376. With additional machines installed during early 1964, it was possible for the machine room to undertake the processing of Education Department's examination results. Preparatory work was completed in April 1964 for Secondary School Entrance and English School Certificate examinations while the processing, calculating and tabulating of the examination results were carried out in June and July. In order to meet a deadline, the machine room staff together with those on secondment from the Education Department had to work under considerable pressure entailing many hours of overtime. In subsequent months, work for the
78
Education Department involved bi-annual statistical reports and process- ing of pre-examination data for the two examinations.
377. Approval was granted in January 1965 for additional staff and equipment for the machine room, that is to say: one Executive Officer, Class I; two Machine Supervisors; one Senior Machine Operator; one Junior Machine Operator; one clerk; one clerical assistant and one messenger; as regards machines, one Type 365 collator, two Type 029 automatic punches, and two Type 129 automatic verifiers.
XIV. ADMINISTRATION AND ACCOUNTS BRANCH
GENERAL
378. This branch, essentially a service branch giving logistic support to the whole department, is under the control of the Senior Accountant and Secretary, a Senior Executive Officer post, assisted by three Executive Officers Class II, responsible for personnel, accounts and stores, and general administrative matters respectively.
ORGANIZATION AND PERSONNEL
379. The distribution of branches within the department at the end of the year is shown in Table 1. Table 10 shows the distribution of the authorized establishment of the department in March 1965 with compara- tive figures for the previous year.
Departmental Organization
380. A major reorganization during the year included creation of an Export Promotion Division, comprising the Export Promotion and Trade Publications Branches, both of which had previously been part of the Development Division. This new Division was created primarily because it had become impractical to expect one Assistant Director to cover the wide field previously enjoyed by the Development Division; a secondary purpose was to ease the transaction to an autonomous Export Promotion Council, which inevitably involved simultaneous extinction of most of the functions of the new division.
381. Important changes in the Development Division were the formation of an embryo Economic Information Centre to record and disseminate information about general economic conditions in Hong Kong, commercial policies of and the state of trade with countries in which Hong Kong has a substantial trading interest.
79
382. The Preventive Service command structure was reorganized to provide for three divisions-Kowloon and New Territories, Hong Kong, and Investigation-each headed by an Assistant Chief Preventive Officer directly responsible to the Chief Preventive Officer, the professional head of the Service. The Assistant Chief Preventive Officer in charge of a new branch, the Industry Inspection Branch, formed by a fusion of units in the department concerned with the inspection of factories regis- tered for certification of origin, and investigation into certification malpractices.
Establishment
383. One additional Administrative Officer Staff Grade B and one Grade C post to give effect to the new organization were approved by the Finance Committee of Legislative Council in May, and later a departmental Assistant Director post in lieu of one Staff Grade C Admin- istrative Officer which permitted promotion of a Senior Trade Officer to that rank. Unfortunately, resignation of Mr. E. G. A. GRIMWOOD from the directorship of the London Office, effective in July, entailed despatch of Mr. B. I. BARLOW, in October to take over the post in London one month after this appointment as acting Deputy Director (Trade and Industry). Failure to recruit a replacement for Mr. GRIMWOOD inevitably prescribed Mr. Barlow's remaining in London, so the new deputy post remained effectively unfilled for the greater part of the year.
384. Apart from the Assistant Director post referred to above filled by substantive departmental promotion, two other permanent Assistant Director posts on the departmental establishment were authorized, one to be head of the London Office and one to head a new overseas office in Brussels.
385. The reorganization of the command structure of the Preventive Service resulted in upgrading the salary of the Chief Preventive Officer, elimination of the post of Deputy Chief Preventive Officer, and establish- ment of one additional post of Assistant Chief Preventive Officer and five Chief Revenue Inspectors (a completely new rank).
386. An additional temporary Executive Officer post was provided for the Administration Branch to cope with an increased work load resulting from expansion of the department and the distribution of its functions among a greater number of buildings.
387. There were considerable increases in the Statistics Branch spread among the Consumer Price Index and Data Processing Units.
80
The first unit was placed on a continuing basis. The Data Processing Unit, although an adjunct of the department, is primarily a statistical service for Government generally; staff increases for the unit were mainly to cover work for the Education Department connected with processing examination results.
Recruitment
388. The Administration Branch was considerably engaged on recruitment at all levels throughout the year. Perhaps the lengthiest and most difficult exercise was recruitment to the directorship of the London and Brussels offices. In both cases the conditions of service were based on the principle, in the long term, of appointing an officer from the Hong Kong establishment, but initial recruitment was confined to special contract appointments. Recruitment to the Brussels post was completed with the appointment of Mr. J. H. MARTIN on 1st January, 1965. Mr. MARTIN spent some nine weeks in Hong Kong before proceeding to Brussels. Recruitment in respect of the London Office vacancy, conducted in Hong Kong and London simultaneously, was incomplete at the end of the year.
389. A sustained effort was made to bring the Trade Officer cadre up to operational strength. At the beginning of the year there were 17 vacancies within an overall establishment of 45 posts, 13 being at Assist- ant Trade Officer level. A recruitment exercise limited, on the advice of the Public Services Commission, to officers in the public service resulted in six Assistant Trade Officer appointments on a trial basis in July/August, whilst two other appointments were made as a result of recruitment initiated in the previous year. Two Trade Officers were appointed on agreement for three years. One Trade Officer and one Assistant Trade Officer resigned. At the end of the year there were 3 vacancies for Trade Officer (with one candidate before the Public Services Commission) and 6 vacancies for Assistant Trade Officer. One Executive Officer post was filled, leaving 6 vacant in a total establishment of 14; as a number of Executive Officer posts are directly complementary to the work of Assistant Trade Officers, the continued existence of so many vacancies seriously hampered the operational work of the department.
390. Vacancies at Trade Officer level at the end of the year produced a serious situation in relation to the department's new commitments to launch export credit insurance and a productivity centre quite apart from inevitable expansion of other settled departmental activities. A decision was therefore taken to recruit specialists, on contract or tem-
81
porary terms, to one Trade Officer and one Assistant Trade Officer vacancy in the Publications Branch. At the end of the year one candidate for the former post was before the Public Services Commission.
391. It was possible to fill a long vacant Assistant Trade Officer post in the Sydney Office by the posting of an experienced officer, and to replace the Assistant Trade Officer on attachment to the London Office.
Training
392. One officer of the General Clerical Service attended a course on Government Accounting and three Executive Officers attended a similar course at a higher level.
393. Mr. WONG Yu-kwan, Revenue Inspector, was awarded a merit visit to the United Kingdom and underwent a series of attachments to H.M. Customs and Excise and also visited a number of Middle and Far-Eastern towns to study customs procedures.
394. Three Executive Officers completed a course on techniques of supervision, whilst one of these officers also attended an Establishment
course.
Appointments and Senior Staff Movements
395. I was instructed to take a short overseas leave during 1964 and left on 7th May and Mr. T. D. SORBY, Administrative Officer Staff Grade B, was appointed Director during my absence. I returned from vacation leave on 1st August and Mr. SORBY reverted to Deputy Director.
396. Mr. B. I. BARLOW, Administrative Officer Staff Grade C, resumed duty on return from leave on 1st May and was appointed Deputy Director, vice Mr. SORBY, with effect from 7th May, remaining in post at head- quarters on Mr. SORBY's reversion until ordered to London on 1st October to take over the duties of the director of the London Office.
397. Mr. D. M. SELLERS returned from leave and assumed duty as Assistant Director (Export Promotion) on 26th September. Mr. SELLERS was subsequently promoted Administrative Officer Staff Grade C ret- rospectively to 22nd July, 1964.
398. Mr. C. P. HADDON-CAVE, Assistant Director (Development) proceeded on vacation leave on 11th March; Mr. W. DORWARD, Senior Trade Officer being appointed to act in his place.
82
399. Mr. J. D. MCGREGOR, Senior Trade Officer, was promoted substantively Assistant Director of Commerce and Industry with effect from 1st April, 1964.
400. Mrs. I. M. WARD, assistant director in the London Office, was appointed to act as director vice Mr. E. G. A. GRIMWOOD whose resigna- tion became effective on 1st July, and remained in charge of the office until Mr. BARLOW took over.
401. Mr. J. H. MARTIN was appointed on 1st January to the new post of Assistant Director, Brussels Office. He arrived in Hong Kong (via Brussels) on 25th January for familiarization and set off for Brussels via London on 29th March.
402. Mr. NG Kwok-tai, Administrative Officer on probation, was posted to the department on return from a course in London with the object of replacing Mr. D. G. JEAFFRESON who departed on leave 1st October.
403. Mr. W. E. MANSON, Senior Trade Officer, resumed duty on 17th November as Trade Representative in Sydney after vacation leave. Mr. MANSON spent two weeks in Hong Kong before returning to duty in Sydney. Mr. G. T. HOLE, Administrative Officer retired in Australia, had undertaken the duties of Trade Representative during Mr. MANSON'S vacation leave.
404. Mr. HUIE Kon-sum, Trade Officer, was promoted Senior Trade Officer with effect from 1st April. Mr. D. J. MARSH, Trade Officer on probation, resigned and ceased duty on 30th June. Messrs. P. DARBY and A. C. SLATER were appointed Trade Officers on agreement with effect from 9th July and 15th October respectively.
405. Mr. M. A. SALTER, Trade Officer, returned from vacation leave on 23rd October. Mr. L. DUNNING, Senior Trade Officer returned from vacation leave on 16th February, 1965. Messrs. L. W. R. MILLS, Trade Officer and YIP Yuk-pui, Assistant Trade Officer, were appointed to act as Senior Trade Officer and Trade Officer respectively on 12th March, 1965.
406. Mr. P. K. C. WONG, Assistant Trade Officer, returned from duty in the London Office and was appointed acting Trade Officer vice Mr. A. L. TOKLEY who proceeded on vacation leave. Mr. S. K. CHAN, Assistant Trade Officer, left Hong Kong on 13th September, to fill the vacant London post.
83
407. Mr. A. L. PURVES, after a brief period in Hong Kong on return from leave, left for Australia on 8th February, 1965 to assume duty as Assistant Trade Officer in the Sydney Office; a post then for the first time filled.
408. Mr. L. C. MILLINGTON, Chief Preventive Officer, proceeded on vacation leave on 27th December and Mr. R. W. NORRIS, Assistant Chief Preventive Officer, commenced vacation leave on 16th November. Mr. D. H. KNOX, Assistant Chief Preventive Officer, and Mr. R. V. L. HATTON, Chief Revenue Inspector, were appointed to act in their place.
409. Senior Revenue Inspectors F. G. CARROLL and R. V. L. HATTON were promoted to Chief Revenue Inspector with effect from 1st April, 1964. Remaining vacancies in the senior ranks of the Preventive Service were filled by acting appointments.
OFFICE ACCOMMODATION
410. As from 19th May, the Export Promotion Division occupied leased accommodation on two floors of the Chinese Manufacturers' Association Building, one block west of departmental headquarters in Fire Brigade Building, bringing to four the number of buildings over which the department (other than the Preventive Service) is spread on the Island. 411. The newly created Industry Inspection Branch moved into the top floor of the Housing Authority Headquarters Building at Ma Tau Kok on 15th March, 1965.
412. Planning to reduce the number of buildings on the Island through- out which the department is spread was in train at the end of the year, with a view to consolidating as much of its activities as possible within Fire Brigade Building. Expansion of the department had forced dispersion in May 1963 of accommodation for the Overseas Trade Relations and Industrial Development branches to Li Po Chun Chambers. Both branches, of paramount importance to the central purpose of the department, are at present housed in an upper floor of a separate building some distance away, in accommodation thoroughly unsatisfactory from the point of view of working conditions. Such dispersion continued to hamper signi- ficantly the efficiency of the department.
WELFARE
413. Staff welfare is the responsibility of the Deputy Director (Ad- ministration), assisted by the Senior Accountant and Secretary.
84
Departmental Quarters
414. A block of married quarters for officers of the Preventive Service at Hung Hom was completed and handed over to the Preventive Service on 24th June. Progress was made on the married quarters for the Preventive Service at North Point. Towards the end of the year, tenders for the work were called for. Quarters in Kowloon for 300 rank and file remained at the planning stage.
415. At its meeting on 7th January, the Finance Committee of Legislative Council approved the inclusion of a Category 'D' item in the Public Works Programme for alterations and an extension to Fanling Revenue Station. This will provide better living accommodation as well as improved amenities for officers stationed at Fanling.
416. One Revenue Inspector attached to Tai Lam Revenue Station occupied a private tenancy near the station, pending completion of the Marine Police Base quarters, one of which has been allocated to the department. Towards the end of March, these quarters were nearing completion.
Welfare Fund
417. There are two welfare funds operated, one for the Preventive Service and the other for the civilian staff. The Preventive Service fund is established by Ordinance to (a) procure for members who are serving or for former members who have been retired on pension, gratuity or other allowance, comforts, convenience or other advantages not chargeable to public revenue, and (b) grant loans to members who are serving or to former members who have been retired on pension, gratuity or other allowance. The fund consists of voluntary donations and a sum voted annually by the Legislative Council. Grants made from the fund during the year were mainly to assist junior ranks who had to find new accommo- dation due to closure orders on dangerous buildings, in one case to meet funeral expenses and in another to pay hospital fees. Purchases made from the fund for the general welfare of the Preventive Service included sports equipment for a New Territories Revenue Station, crockery and utensils to provide a hot meal service for officers on duty in the harbour, and three washing machines to provide a laundry service.
418. The fund for the civilian staff originates from voluntary contribu- tions. One grant was made from the fund to assist in funeral expenses.
419. Advances of one month's salary were made to a number of officers moving into new accommodation.
85
Leave
420. The work load on the directorate and on Trade Officers and Executive Officers in conjunction with the number of vacancies made it almost impossible to grant local leave to expatriate officers and any kind of leave to other officers except where there was danger to an individual's health. The Preventive Service leave roster was adhered to as far as possible, but with great difficulty and some degree of sacrifice to opera- tional efficiency; there is a huge backlog of leave owing to the service as a whole.
421. Vacancies in the clerical establishment frustrated attempts to set up a leave reserve. Nevertheless, officers were generally able to take leave as required, rather than on a roster basis.
422. Sick leave for the entire department amounted to 395 weeks. Twenty-eight women officers were granted maternity leave and thirty- three other officers received hospital treatment at various times.
Revenue Inspectors' Mess
423. The Mess was air-conditioned and completely redecorated during the year. Among the many functions held was a Christmas dinner dance, which was well attended by distinguished guests and Preventive Service officers.
Clerical Canteen
424. The Clerical Canteen was opened for business on 27th April under a new caterer, and with improved furniture, equipment and kitchen facilities. It is now administered by a Management Committee with repre- sentatives from the Secretariat for Chinese Affairs and from the Preventive Service, as well as the civilian staff of the department. It is well patronized by both clerical officers and junior members of the Preventive Service.
Sports/Social Club
425. A departmental Sports/Social Club formed in August attained a membership of over two hundred. Among the functions organized by the Club were a social evening, a Chirstmas dance, and a football match followed by a Chinese dinner party. The object of the Club is to promote the well-being of its members in sports and social activities. It is managed by a Committee from the mid-level of the department with myself and the Deputy Director (Administration) as ex-officio President and Vice President respectively.
86
ACCOUNTS AND STORES
Revenue
426. Net Revenue collected by the department amounted to $262,109,719 ($232,555,569) an increase of 12.7%. This was 19% of all recurrent revenue collected by Government during the year. Details of revenue for dutiable commodities are given in tables 5 to 7 and Chapter XI.
Forfeitures
427. Revenue from forfeitures showed a considerable decrease com- pared with the previous year due to a decline in sales of valuable confiscated goods.
Expenditure
428. Expenditure from departmental votes amounted to $13,980,945 which was $749,845 under the approved estimates. Savings were mainly due to vacancies remaining unfilled in the departmental establishment and to delayed payment of capital expenditure on extension and alterations to the London Office premises.
Stores
429. The procedure for the storage, documentation and disposal of seized and confiscated goods continued to work satisfactorily. No serious discrepancies were raised by Audit and Treasury during the year and minor queries were satisfactorily answered.
430. Confiscated liquor, tobacco and cigarettes were sold at an au- thorized rate equivalent to the retail price less 20%, but without any warranty as to condition. Free issues were confined to certain approved charitable organizations. Compared with last year, the quantities of items sold or issued free and their respective values were as follows:
Sold:
Liquor Cigarettes
Cigars
Tobacco
1963-64
1964-65
...
Quantity
8,623 qts. 1,044,590 pcs.
Value
$ 61,114
Quantity
Value
9,319 qts.
$45,414
423,741 pcs.
40,839
20,540
7,950 pcs. 2,950 lbs.
4,035 pcs.
11,493
2,592 lbs.
10,563
Total
...
$113,446
$76,517
87
Distributed free
Liquor Cigarettes Tobacco
1963-64
1964-65
Quantity
Value
Quantity
Value
...
3,020 bots.
$15,814
2,870 bots.
$13,687
394,983 pcs.
11,454
550,229 pcs.
16,066
1,405 lbs.
5,559
1,747 lbs.
6,499
Total
$32,827
$36,252
431. Proceeds of cash sales are apportioned between the appropriate revenue sub-heads, namely Duties and the Revenue Reward Fund, while credits resulting from issues to other departments go entirely to the Fund, which is used for the payment of rewards for information leading to the seizure of contraband. The Fund is maintained at a maximum of $200,000, sums in excess of this amount being transferred to general revenue. Total credits during the year resulting from sales and issues to other departments
were:
Revenue Head 1 Duties; Sub-head 2 Liquor Revenue Head 1 Duties; Sub-head 4 Tobacco Revenue Reward Fund
...
$34,658
7,819
34,040
$76,517
432. The Audit Department maintains a running audit of the depart- ment's accounts, with particular regard to assessments of duty on dutiable commodities.
HONG KONG,
2nd August, 1965.
D. R. HOLMES,
Director of Commerce and Industry.
88
89
TABLE 1
COMMERCE AND INDUSTRY DEPARTMENT ORGANISATION CHART (as at 31st March, 1965)
DIRECTOR
DEPUTY DIRECTOR (Trade & Industry)
ASSISTANT DIRECTOR
TEXTILES & CERTIFICATION DIVISION
Senior
Trade Officer
DEPUTY DIRECTOR
(Administration)
ASSISTANT DIRECTOR
ASSISTANT DIRECTOR
DEVELOPMENT DIVISION
DIVISION
EXPORT PROMOTION
ASSISTANT DIRECTOR
CÓMM
DUTIABLE COMMODITIES & CONTROLS DIVISION
Trade Officer
PREVEN-
TIVE SERVICE
Chief Preventive Officer
Overseas Trade Relations Branch
Trade Development
Branch
Trade Publications Branch
Dutiable Commodities Branch
Trade Licensing Branch
Senior Trade
Officer
Senior Trade
Officer
Senior Trade Trade Officer
Officer
Assistant
Assistant
Trade Officer
Trade
Officer
Certification
Branch
Trade Officer
Textiles Branch
Trade Officer
Industry Inspection Branch
Assistant Chief Preven-
tive Officer
Industrial Development
Branch
Economic
Information Centre
Statistics Branch
Statisticians
Accounts & Administration
Branch
Senior Accountant & Secretary
Overseas Offices
London Office: Assistant Director Sydney Office Senior Trade Officer Brussels Office: Assistant Director
TABLE 2A
EXPORTS OF COTTON TEXTILES RESTRAINED UNDER G.A.T.T. COTTON TEXTILES ARRANGEMENTS
FROM OCTOBER, 1961 TO SEPTEMBER, 1964
3rd Long Term Year 1964-65
2nd Long Term Year 1963-64
1st Long Term Year 1962-63
Restraining countries
Short Term Year
1961-62
Unit
Restraint Level
Restraint Level
Exports
Restraint
Level
Exports
Restraint Level
Exports
U.S.A.
sq. yd.
274,712,288
37 categories
251,112,600 36 categories
243,286,600 231,144,890
30 categories
227,157,291
231,144,890 30 categories
244,858,353 (1)
Canada
...
doz.
sq. yd.
712,000 7 garment categories
6,000,000
614,000
484,595
6 garment cats. N.A.
600,000 6 garment cats.
517,954
385.000
400,138 (1)
4 garment cats.
5,863,113
N.A.
5,994,087
N.A.
1,021,486
90
6 fabric categories
Federal Republic of Germany
doz.
380,000
350,000
309,139
N.A.
347,987
N.A.
214,027
Woven nightwear
Norway
doz.
...
20,000
18,000
16,951
16,000
15,960
N.A.
46,897
Woven sports & work shirts
doz.
56,000
51,000
45,389
46,000
44,975
N.A.
70,609
Woven nightwear
Italy
sq, yd.
4,680,000
N.A.
5,828,832
N.A.
6,015,654
N.A.
Nil
5 fabric categories as one group (2)
(1) The restraint levels for some categories established in accordance with the 15-month roll-back formula were lower than the
exports recorded for the Short Term Year.
(2) From 16th March to 31st December, 1965.
N.A. = not applicable.
91
TABLE 2B
EXPORTS OF RESTRAINED COTTON TEXTILES TO THE UNITED KINGDOM
FROM 1962 TO 1964
1962
1963
1964
Description
Unit
Restraint level
Exports (1)
Restraint level
Exports
Restraint level
Exports
Yarn ...
lbs.
N.A.
7,825,129 6,300,000
6,300,000 6,300,000
6,106,789
Loomstate Fabrics
sq. yd.
100,000,000
Finished Fabrics
sq. yd.
80,008,804
20,882,840
79,999,700
81,234,339
100,000,000
100,000,000 (2)
19,054,265
16,132,523
Garments and made-
up goods
sq. yd. 85,000,000
89,344,278 85,000,000
84,611,060 85,000,000
83,759,407
(1) Including shipment in January 1962 covered by the first Cotton Undertaking.
(2) Sub-ceiling for finished piecegoods: 30 million sq. yds.
Note: Export figures include shipments made during the carry-over period in the subsequent year.
1964 figures include exports against 1964 quota up to 31st March, 1965.
Year
Certificates
Standard Certificates of Origin
Commonwealth Preference Certificates:
ORIGIN STATISTICS
1963-1964
Value of Goods Certified $Mn. (Percentage Change)
No. Issued (Percentage Change)
1,036.7
145,098
(+20.1)
(+2.2)
1964-1965
Value of Goods Certified $Mn. (Percentage Change)
1,230.7 (+18.7)
TABLE
CERTIFICATION OF
1962-1963
Value of Goods Certified $Mn. (Percentage Change)
863.4
(+22.6)
3
No. Issued (Percentage Change)
141,943 (+3.7)
No. Issued (Percentage
Change)
136,862
(+9.0)
:
:
:
13,355 (+15.0)
119,608 (+12.0)
:
6,312
++
(a) Britain
66,694
787.8
73,287
909.7
74,029
940.4
(+19.8)
(+37.7)
(+9.9)
271,523
286,237
(+15,5)
(+1.0)
297,123
(+3.4)
(b) Other Countries
38,999
(+7.4)
(-10.2)
156.4 (-1.9)
37.829 (+5.4)
189.9
38,937
(+3.8)
228.5
(-3.0)
(+21.4)
(+2.9)
(+20.3)
Comprehensive Certificates of Origin:
(a) Commercial
28,968
(+3.1)
456.0
(-13.5)
(b) Mail Order
(c) Tourist
(d) Gift Plan
(e) Sample
12,952
(+60.1)
99,941
(+13.1)
33,178 (+14.5)
18,477 (+42.7)
658.2 (+20.0)
548.7 (+20.3)
39,059 (+17.7)
23,413 (+26.7)
111,761
,
100,890
(+11.8)
(-9.7)
13,797
133,652
12,550
121,958
(+3.3) (+11.7)
(-9.0)
(-8.7)
(-7.9)
8,094 (+28.2)
8,518
(+5.2)
Total
404,083
(+9.9)
2,263.7 (+15.4)
438,366
(+8.5)
2,685.0 (+18.6)
442,494
(+0.9)
3,057.7 (+13.9)
Domestic Exports ($Mn.)
3,413
3,970
4,590
66.3
67.6
66.6
Percentage Certified
Value of stamp fees paid (Including
miscellaneous certificates, not recorded above)
92
$4,119,505
$4,472,860
3335
93
$4,702,155
94
CATEGORY
COUNTRY
U.S.A.
TABLE 4
TRADE COMPLAINTS FROM OVERSEAS COMPANIES OR INDIVIDUALS
(April 1964
March 1965)
U:K.
Australia/
New Zealand
Africa
ON
(Excluding
Europe
U.K.)
Middle East
Non-delivery
240
25
215
28
841
9
6
4
نیا
3
331
35
16
7
4
4
5
314
Inferior quality ...
33
17
12
7
7
5
2
5
29
88
16
9
7
9
11
3
85
Outstanding debts
11
5
7
25
14
13
6
12
93
15
6
32
22
15
3
10
104
Short-Shipment...
2
1
2
1
2
1
9
5
1
1
2
11
Breach of contract
4
1
5
2
12
1
3
2
22
Infringement of trade marks
Infringement of patents &
1
1
3
designs
Miscellaneous
Total
12
10
2
13
20
14
11
9
5
2
2
8
71
2
3
6
307
75
73
51
35
25
13
30
609
268
74
51
60
44
33
8
20
558
Corresponding figures for the previous financial year are shown below the diagonal.
w C. & S.
America
Miscellaneous
Countries
TOTAL
TABLE 5
NET REVENUE COLLECTED FROM ALL SOURCES
Approved
Actual Revenue
Estimates
Increase/ Decrease
1964-65
1964-65
1963-64
$
$
$
%
Duties
Hydrocarbon oils imported
68,000,000 75,816,340
65,227,152 + 16.2
Intoxicating liquor imported...
39,000,000
48,220,843
38,791,778
+ 24.3
Liquor other than intoxicating
liquor imported
1,500,000
2,325,429
1,688,717
+ 37.7
Tobacco imported
101,500,000
101,184,068
93,314,242
+ 8.4
Liquor locally manufactured... 22,000,000
21,350,355
21,058,029
+
1.4
Table waters
...
5,500,000
6,328,163
5,414,096
+ 16.9
Licences
Hydrocarbon oils
200,000
195,887
112,219
+74.6
Liquor
...
...
2,225,000
2,582,541
2,061,074
+ 25.3
...
760,000
785,935
603,550
25,000
32,207
13,255
+ 30.2 +142.9
Tobacco
Miscellaneous (table waters)
Fines and Forfeitures
Fines
Forfeitures
Fees of Court or Office
Denaturing
Factory inspection and
supervision
Official certificates
Official signatures
Departmental services and
supervision
...
Overpayments in previous
years
...
Anti-narcotic smuggling guards
Bonded warehouse supervision Loss of, or damage to
Government property
Officials and others for light, fuel, etc. in Government
35
200,000
173,895
55 2,906,060
―
36.4
520,000
453,113
499,982
9.3
75,000
57,417
27,624
+107.8
22,000
17,400
16,980
+ 2.5
8,000
5,080
7,575
32.9
282
14
52,260
5,480
16,000 300,000
10,234
12,468
363,741
234,621
17.9 + 55.0
100
26
...
70
buildings
100
65
Advertisement revenue
440,000
Publications
...
15,000
Surplus and condemned stores
453,300
437,029 12,586 1,645,754
499,023
12.4
14,478
13.1
1,142,975*
+ 43.9
Miscellaneous
...
...
32,600
59,099
46,963
+ 25.8
242,792,100 262,109,719 233,698,545
+ 12.2
not included in 1963-64
95
Liquor:
Whisky
Brandy
Gin
Wines
Beer
Other European Type ...
Chinese Type-
(a) Locally Distilled
(b) Imported
Spirituous liquor other than
intoxicating liquor
Methyl Alcohol
Total:
Tobacco:
Cigarettes & Cigars
European Smoking Tobacco
(including Snuff)
Chinese Prepared Tobacco
Tobacco Leaf
Total:
Hydrocarbon Oils:
Light Oils Diesel Oils
Furnace Oils
Other Type
Total:
Table Waters:
:
:
⠀
::
TABLE
6
DUTY FROM DUTIABLE
COMMODITIES (GROSS)
1963-1964
1964-1965
1962-1963
Unit
Quantity
Per- centage Change
Duty
Per- centage Change
Per-
Per-
Per-
Per-
Quantity centage Change
Duty
centage Quantity centage Change
Duty
Change
centage Change
$
$
$
Imp. Gal.
82,383
158,584
31,449
"
101,672
""
4,785,229
13,329
++1++
1.4
* 5,377,785
10.3
*11,456,777
2.2 * 2,116,995
9.8
2,294,058
10.3 * 8,371,189
1.8
**
928,937
++++++
21.8
101,741
+ 29.7
200,190
17.9
7.3
34,399 119,551
+ 31.1
6,120,243
17.4
14,246
++++++
23.5
26.2 9.4
6,641,301 14,440,755
2,312,815
17.6
2,615,363
27.9
11,188,429
6.9
994,133
++++++
23.5
118,255
26.0
247,371
9,2
40,963
14.0
33.7
138,513 7,481,808
7.0
16,766
2,124,874
589,585
97,230
*
15
+++
3.4
*14,686,187
21.9
* 5,442,097
10.4
* 1,316,041
908
0.3
*
16,326
++ ++
11.8
+ 27.1
2,165,575 793,213
+
1.9
34.5
15,176,811 7,540,747
++
3.3
38.6
2,087,863 1,164,408
+1
++++++
18.2
7.0
129,308 1,916
++
33.0
+ 111.0
7,985,243 +
9.0
52,006,392 + 21.2
9,680,382
+ 21.2
1,704,414 + 29.5
33,013
62,647,781
200,135
+ 102.2
+ 20.5
2,855
11,498,937 +
++
lbs.
5,184,446 +
6.7
40,623,303 + 6.7
5,833,366
"
"
66,662 + 42.8 447,957 +1881.7 16,420,088 + 29.5
397,815 + 39.3
† 1,119,892
+ 910.9
71,697 462,249
91,919,027
+ 29.4
19,939,707
+++ +
12.5 46,015,584
7.6
3.2
427,878 1,155,623
21.4
112,163,464
+++ +
13.3
6,006,851 +
++
7.6
85,706
3.2
22.0
487,769 16,392,246
++1
22,119,153 + 25.6
134,060,037 + 22.4
26,307,019
+ 18.9
159,762,549
+
19,2
22,972,572
Imp. Gal.
*
>>
93
Intoxicating Liquor
Spirituous liquor other than
intoxicating liquor
Table Waters
Tobacco
Hydrocarbon Oils
Total:
* Duty rates increased with effect from 28,2.62.
† Duty rates decreased with effect from 31.3.62. Duty rates increased with effect from 26.2.64.
20,495,383
41,110,850 165,634,048 40,386,044
267,626,325
96
16.2
7,718,757
23.6
17,858,091
19.1
2,765, 196
15.9
2,877,881
22.2
13,879,265
17.7
1,160,563
++++++
16.2
+ 23.7
19.6
10.0
24,1
16.7
3.6
14,509,957
4.4
46.8
10,922,343 + 44.8
54.8
2,323,817
36.3
49.0
53.726 + 62.7
18.8 74,069,596 + 18.2
3.0
52,134,871 + 13.3
19.5
563,033 + 31.6
5.5
1,219,425 + 5.5
17.8
96,355,431
14.1
12.7 150,272,760
5.9
+++
5.8
26,462,487
+ 3.5
21,710,745
20.1
11,308,836
36.9
46,089,210
11.3
17.2
16,563,405 3,997,842
+
11.3
188,267,282
17.0
+ 13.0
58,332,570 + 11.9
44,010,849
300,078,086 + 12.1
++++
5.9
27,895,954
12.1
14,179,617
13.7
9.0
18,826,728 4,339,356
65,241,655 + 11.8
++++
5.4
24,856,530
25.4 13.7
53,175,778
217,237,562
8.5
46,496,633
341,766,503 + 13.9
++++
14.5 30,512,062 15.4 15.4 5.6
19,007,521
21,723,756
4,580,925
75,824,264 + 16.2
++++
9.4
34.0
15.4
5.6
10,436,466
+ 21.4
5,009,503 + 21.4
11,281,135
+ 8.1
5,414,947 + 8.1
13,184,264 + 16.9
6,328,447
+ 16.9
Refund and Drawback
287,089
6.4
§ 1,060,547
+ 269.4
98,806 68
+6700,0
49,066,540 11,654
+
-
91.3
+ 125.8
850
51.5
48,711
66,448,307 + 35.4
50.7
-+-1150.0
49,088,692
14,504
+ 24.5
67,572,919 + 36.6
2,120,822
52,147 284
+ 100.0
+ 7.1
66.6
26.1
7,923
45.4
24.1
49,464,157 + 50.4
51,269,898
With effect from 16.12.63 the procedure in relation to sales of duty-free liquor to departing air passengers changed over to a 'refund of duty on duty-paid liquor' basis.
97
TABLE 7
REVENUE FROM DUTIABLE COMMODITIES LICENCES, 1964-65
Importer's:
Liquor
...
...
...
Tobacco
Hydrocarbon Oils
Table Waters
Methyl Alcohol
...
...
No. of Licences Issued
Revenue
$ 185,000.00
40,500.00 115,500.00
370
...
...
81
226
42
12,600.00
30
300.00
Exporter's:
Liquor
Tobacco
160
3,070.00
53
...
...
2,000.00
...
Hydrocarbon Oils
Table Waters
Methyl Alcohol
Dealer's:
European-type Liquor
Chinese-type Liquor
Spirituous Liquor
Tobacco
Hydrocarbon Oils
Methyl Alcohol
Retailer's:
Chinese-type Liquor
Spirituous Liquor
Beer
...
Medicated Liquor Tobacco
Hydrocarbon Oils
...
47
470.00
10
1,550.00
2
20.00
...
...
444
1,833
663,300.00 1,240,710.00
533
...
53,300.00
200
...
...
100,000.00
434
...
...
...
43,400.00
31
310.00
179
...
25,950.00
...
...
...
2,017
182,050.00
...
...
...
2,756
171,850.00
2
100.00
...
...
9,929
...
...
616,809.00
872
...
21,777.50
9
90.00
Methyl Alcohol
Manufacturer's:
(Distiller
16)...
(Brewer
1)
Liquor
(Still
5)
(Manufacturer 1)
Tobacco
...
...
23
18,800.00
...
...
8
*
8,000.00
20
11,900.00
17
...
22,060.00
9
12,000.00
10
10,000.00
16
1,050.00
7
70.00
+
361
...
3,610.00
28,813.74
...
Table Waters
Warehouse:
Liquor
Tobacco
...
Hydrocarbon Oils
Table Waters
Methyl Alcohol
...
...
Ship and Harbour Vessel Licences
...
++
Licence Fees for Persons Importing for Own Use
and Miscellaneous
...
Total:
...
Tobacco Licence Fees
...
Refunds: Liquor Licence Fees
20,731
$3,596,960.24
265.56
125.00
Total:
$
390.56
$3,596,569.68
98
Net Total:
TABLE 8
CONFISCATIONS UNDER THE DUTIABLE COMMODITIES ORDINANCE (NO. 26 OF 1963) AND DANGEROUS DRUGS ORDINANCE, CHAPTER 134
COMMODITY
QUANTITY
UNIT
1963-64
1964-65
lb.
10,203.16
8,527.51
lb.
...
·
...
2,391.00
1,095.80
lb.
632.50
936.70
:
...
lb.
181.20
450,88
...
...
...
...
Ib.
6.00
36.50
...
£ £
75.30
110.27
187.14
86.61
lb.
25.00
Tobacco
Chinese prepared tobacco
Foreign cigarettes
Macau and Chinese cigarettes
Cigars
Tobacco stems
Tobacco leaf
Pipe tobacco
Tobacco dust
Liquor
...
...
European type liquor Chinese type liquor
Beer
...
Chinese medicinal wine
Alcohol
...
Mash
...
: :
gal.
1,369.71
803.29
...
...
gal.
2,443.49
3,375.30
+
gal.
505.84
928.00
...
...
...
gal.
621.66
307.00
gal.
70.50
8.70
...
gal.
68,934.00
49,775.00
no.
499
224
Stills
...
Hydrocarbon Oils
Treated diesel oil ...
Dangerous Drugs
Opium, raw
Opium, prepared
...
Opium, dross
Opium, water
:
::
...
:
...
gal.
1,527.50
1,489.90
lb.
945.33
1,265.18
lb.
36.19
23.63
lb.
22.33
3.58
1.
lb.
lb.
fl. oz.
1,600.66
488.5
29.54
124.41
131
lb.
18.55
74.84
lb.
115.92
92.43
...
no.
214
193
no.
156
44
no.
677
642
...
Morphine
...
...
...
Morphine hydrochloride...
Diacetylmorphine hydrochloride
Barbitone
Opium pipes
Opium pipe heads
Opium lamps
...
: :
99
TABLE 9
MAJOR CONFISCATIONS UNDER OTHER LEGISLATION, 1964-65
Legislation
Commodity
Unit
Quantity
Importation and Exportation
Ördinance, Chapter 50, and
Gold
lb.
84.34
Acetic anhydride
gal.
33.2
Regulations made
thereunder
Acetic anhydride
tin
145
Coffee
tin
9,744
Watches
no.
147
...
Watch movements
no.
139
Watch crystals
no.
51
Watch inner metal rings no.
400
Watch crowns
...
Watch dials
...
doz.
83
box
8
Watch parts Watch bands
Labels
Silver coins
Silver ingots etc.
Playing cards
Mustard powder
package
1
no.
31
***
...
package
1
...
no. kilo.
950
5.18
set
360
package
120
Tea
...
lb.
10,460
Merchandise Marks
Ordinance, Chapter 41
Dies
Records
Hair spray
Printing blocks
no.
2,679
...
tin
76
set
1
...
no.
2
Labels Shirts
...
...
no.
1,155
no.
1,202
Defence Regulations, 1940
Diamonds Jade
piece
60
...
piece
14
Watches
no.
8
...
Agricultural Poisons Regulations, 1955
Penicillin Ordinance,
Chapter 137
Diethyl paranitrophenyl
thiophosphate
C.C.
107,409
Penicillin tablets
no.
203
Penicillin ointment
tube
12
Penicillin powder
vial
9
Penicillin sesame oil
vial
1
Penicillin oil
vial
50
100
TABLE 10
DISTRIBUTION OF AUTHORISED ESTABLISHMENT
31.3.65.
31.3.64.
Directorate
Development Division
Overseas Trade Relations Branch
Industrial Development Branch
8
6
27
19
16
43
29
48
Textiles and Certification Division
Textiles Branch
Certification Branch...
43
31
6
...
6
Certificates of Origin Section
Comprehensive Certificates of Origin Section
Commonwealth Preference Section
40
36
19
17
16
13
Industry Inspection Branch (1)
Export Promotion Division
Trade Development Branch
85
209
77
180
...
19
23
Trade Publications Branch...
Controls Division
Trade Licensing and Supplies Branch Dutiable Commodities Branch
Kowloon Office
Preventive Service (1)
Headquarters Section
→
***
Prosecution and Investigation Section
Training Section
Eastern Revenue Station Western Revenue Station Special Section (Narcotics) Kowloon Revenue Station Fanling Revenue Station... Tai Lam Revenue Station
Overseas Offices
London
...
...
...
•
...
::
10
29
10
33
28
33
...
...
32
32
19 79
19 84
18
28
+
...
11
11
5
4
...
29
69
...
149
89
200
197
85
78
...
...
47
45
...
23
567
19
540
25
21
Sydney
Brussels
6
7
...
2
33
28
...
...
Statistics Branch
...
Trade Statistics Section
Miscellaneous and Research Sections
Price Index Unit
Data Processing Unit
...
Administration and Accounts Branch ...
Administration Section
Accounts and Stores Section
Leave Reserve
...
6
...
...
6
51
...
17
...
107
...
...
26
35
135
113
...
2
2
34
29
...
...
19
19
23
78
21
71
1,181
1,103
(1) Previously included under Preventive Service.
101
A
{
날
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GPHK
Printed by the Government Printer
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Price: $7.50
1