HON
100 1768
UN
KONG
ANNUAL
LIBRARY
DEPARTMENTAL
REPORTS
KONG
1966-67
+
DIRECTOR OF
COMMERCE AND INDUSTRY
་་་
HONG KONG
ANNUAL DEPARTMENTAL REPORT
BY THE
DIRECTOR OF COMMERCE AND INDUSTRY
T. D. SORBY, J.P.
FOR THE
FINANCIAL YEAR 1966 - 67*
PRINTED AND PUBLISHED BY S. YOUNG, GOVERNMENT Printer
AT THE GOVernment PreSS JAVA ROAD, HONG KONG
* 1st April 1966 – 31st March 1967
CONTENTS
Chapter
I. REVIEW OF THE YEAR 1966-67 .
II. OVERSEAS Trade RelATIONS BRANCH
International Institutions and Developments
General Agreement on Tariffs and Trade. The Organization for Economic Co-operation
and Development.
Man-made Fibre and Wool Textiles.
U.N. Economic Commission for Asia and the
Far East
Individual Countries
Paragraphs
1 - 54
55 - 58
59
60
61 - 62
Australia
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Austria
63
64
France
Federal Republic of Germany
Malaysia and Singapore
65
66 - 68
69
―
71
Nigeria
72
Republic of South Africa
73
Sudan
74
United States of America.
75 77
―
•
Country Pamphlets
78
III. TEXTILES DIVISION
The G.A.T.T. Long Term Arrangement Regard-
ing International Trade in Cotton Textiles
79
82
Export of Cotton Manufactures to Britain
Export of Cotton Manufactures to the U.S.A.
83 - 85
86
88
iii
Chapter
Paragraphs
Export of Cotton Manufactures to Other Countries
Canada
89
Federal Republic of Germany.
90 - 92
Norway
Benelux
Woollen Knitwear Exports
IV. OVERSEAS OFFICES
93
94
95 - 98
London Office
General and Office Accommodation .
99 - 100
Trade Relations
101 - 103
Public Relations and Liaison with Trade
Development Council
104 - 110
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Hong Kong House
111
Brussels Office
Staff and Accommodation
General
Trade Negotiations
Economic and Commercial Relations
Geneva Office
General and Opening of Office .
Work of the Office
Washington Office
V. CERTIFICATION OF ORIGIN BRANCH
General
Standard Certificates of Origin
Commonwealth Preference Certificates.
Comprehensive Certificates of Origin
·
112 - 113
114 116
117
-
118 119
-
120
122
123
•
124
128
129
131
132 - 133
134 137
--
138
145
+
Certificates of Processing
146
Miscellaneous Certificates
147
Changes in Certification Requirements of Various
Territories.
148
—
155
Certification Co-ordination Committee
Revenue
iv
156
159
—
158
Chapter
VI. INDUSTRY INSPECTION BRANCH
General
Inspections
Kowloon Inspection Control
Investigations
Prosecutions.
Anti-Corruption Measures
VII. INDUSTRIAL DEVELOPMENT BRANCH
Review of Industry
Textile Spinning
Textile Finishing
Paragraphs
160
161
162
·
163
-
164 166
·
167
168
169 - 173
·
174
Cotton Knitting
Woollen Knitting
Wearing Apparel
175
176
·
177 - 178
•
Plastics
Light Metal Products
Electronics
Hair Wigs.
179 - 180
181 - 184
D
185 - 186
·
187
Machinery
188
Tsuen Wan/Kwai Chung/Tsing Yi
Shipbuilding
Shipbreaking and Steel Rolling Mills
Land for Industry
Kwun Tong
Industrial Land Sales
Industrial Co-operation
Health and Safety Standards of Hong Kong
Products
General
Drink Coolers
Liquid-Filled Toys
Toys-Lead Content. Toys-Faulty Designs
189 - 190
. 191
191 – 192
193
194
195
·
196
197
•
198 - 199
200
201 - 203
204 - 205
206
V
Chapter
Electrical Products
•
Economic Commission for Asia and The Far
East
Asian Productivity Organization
Immigration Enquiries
Paragraphs 207
208 - 209
210 - 212
213
Trade Complaints
VIII. TRADE LICENSING AND SUPPLIES BRANCH
214
215 - 221
222
Trade Licensing
Supplies Section
Rice
Frozen Meat
Coal
Firewood
Accounts
IX. DUTIABLE COMMODITIES BRANCH
223 - 227
+
228
229
230
231
232
Revenue from Excise Duties
233
234
Tobacco
235
Hydrocarbon Oils
236 - 237
Liquor.
238
239
Table Waters
240
Revenue from Licences
241
242
X. PREVENTIVE SERVICE
General
Marine Conversion
Preventive Service Review
June Rainstorm Damage
Food Unit Exercise
Organization
vi
243 244
―
245
247
248
249
250
·
·
+
246
Chapter
Training
Training Adviser's Report Courses
Staff and Discipline
Searches
Narcotics
Bullion
Court Actions
XI. STATISTICS BRANCH
General
Trade Statistics
New Regulations
Classification
Trade Declarations
Revenue and Cost
+
Paragraphs
251
252 - 260
261 - 266
267 - 272
•
273 - 278
279
280
282
283 - 284
285
-
286 287
288 - 291
Parcel Post Statistics.
292 - 293
Consumer Price Indexes
Movements of the General Consumer Price
Index
294
295 296
-
Movements of the Modified Consumer Price
Index
297 - 299
Consumer Price Index Moving Annual Average 300
Retail Price Index
301 - 302
Continuous Household Expenditure Surveys
303 - 304
Industrial Production Statistics
Future development.
305 - 309
Research.
310 - 311
Publications
Data Processing
312
313 - 318
Conference of Asian Statisticians
vii
. 319
Chapter
XII.
ADMINISTRATION AND ACCOUNTS BRANCHES
General
Overseas Offices
Organization and Personnel
Departmental Organization
Senior Staff Movements
Establishment
Recruitment
Training
•
Office Accommodation
Welfare
Departmental Quarters
Revenue Inspectors' Mess Clerical Canteen
XIII. ACCOUNTS AND STORES
Revenue
Expenditure .
Stores.
Welfare Funds
Paragraphs
320
•
•
+
•
·
321 - 323
•
324
325 - 328
329 - 333
334
335 - 337
•
338 - 343
344
345
346
347
348
349
+
350 - 353
354
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I. REVIEW OF THE YEAR 1966-67
INTRODUCTION
HONG KONG'S overseas trade for the calendar year 1966 is the subject of a separately published review. It is sufficient as background to a review of departmental activities and administrative development to record that the value of trade for 1966 showed once again a very satisfactory increase over the previous year. The value of domestic exports reached a new record level at $5,730 million, 14 per cent above 1965. There was a substantial recovery in exports to the United Kingdom after the fall in 1965 and continuing gains in markets in the United States, the Federal Republic of Germany, Canada and the Netherlands. Imports at $10,097 million advanced nearly 13 per cent over 1965. Owing mainly to a resurgence of trade with Indonesia, re- exports increased 22 per cent over 1965 to reach $1,833 million, 24 per cent of total exports, and 18 per cent of imports.
2. As His Excellency the Governor mentioned in Legislative Coun- cil on 1st March, these figures were inflated, possibly by some 5%, by a sudden rush of import and export declarations in the latter half of 1966, as a result of new legislation designed to provide funds for trade development. Thus the real rate of improvement is less spectacular than these figures indicate, but it is still impressive.
3. The fiscal year ending 31st March, 1967 was characterised by five important achievements in which almost every executive branch of the department was involved:
(a) Three years of intensive effort culminated in statutory effect being given to three independent institutions disposing of sub- stantial public funds, that is to say the Trade Development Council, the Export Credit Insurance Corporation, and the Productivity Council. Each of these organizations will have a major influence on the future of Hong Kong's commerce and industry and therefore on the well-being of its people.
(b) Following a comprehensive cotton textile agreement concluded with Britain in the previous year, similar agreements were con- cluded with the United States and the Federal Republic of
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Germany, together with an agreement on woollen knitwear with the latter. Negotiation of these international agreements entailed much time and effort and perfecting of the techniques of export control on which the agreements rely for implementation. Advice from the Cotton Advisory Board (and in the case of woollen knitwear from the Trade and Industry Advisory Board) was sought during all stages of the negotiations.
(c) Hong Kong's vital origin certification system, and its executive arm, has been reorganized in discussions with interested parties over the past two years to the point where drafting instructions on a basis agreed with unofficial institutions could be given to Crown lawyers.
(d) A major review of official rice policy in previous years was con- tained in a paper tabled in the Legislative Council on 1st February. I took the opportunity to speak in some depth on past and future policy against the background of a strong upsurge of prices in exporting countries.
(e) A blue-print for the collection of industrial production statistics has been prepared with the advice of the Trade and Industry Advisory Board, and can be implemented when finance and staff are available.
4. These are substantial achievements which could not have been accomplished without the experience, energy, and determination of the deputy and assistant directors and the senior statistician of the depart- ment, working in harmony with my appointed unofficial advisers and, noteworthily, in some cases, with the co-operation of the drafting officers of the Legal Department. Other officers in the department have also been involved by secondment to the embryo statutory institutions, at some considerable sacrifice of scarce experience, which was accepted as desirable in the general public interest. Inevitably there has been a residual challenge to less experienced officers who have had to take on new responsibilities with the minimum of preparation and training. In general, they have responded eagerly and effectively.
5. During the year the department put into operation internal structural changes and increased its overseas representation in accord- ance with plans which had been maturing for the previous two years. By the end of 1964 it had become quite clear that Hong Kong's com- mercial interests in the United States and its increasing involvement in
2
the activities of international trade organizations such as the G.A.T.T. and_the_U.N.C.T.A.D. made it unreasonable for the Colony to rely on part-time assistance of staff of British missions in key areas, generous as this assistance has been. During the year new offices in Washington and Geneva, previously authorized, opened for business. This was achieved without loss of departmental staff due to the assistance of Her Majesty's Government which agreed to the secondment of two experienced officers to establish the new posts. The presence of these two officers working full-time on Hong Kong affairs has added to the department's ability to keep open the channels of trade and to resist. unreasonable or illegal restrictions. Within the department the divisions and branches concerned with overseas commercial relations were brought together under the immediate supervision of one of my deputies. In addition, the techniques of assessment, presentation and negotiation were re-examined and refined to ensure a more positive and rapid reaction to changes in international commercial policy.
EXTERNAL COMMERCIAL POLICY
A Year of Bilateral Agreements
6. The short and complex history of textile agreements has developed along two main streams. On the one hand, there has been a series of progressively more comprehensive bilateral arrangements with Britain, starting in 1959 and preceding similar agreements concluded by the United Kingdom with India and Pakistan. On the other hand, there were the product by product, year by year, country by country agree- ments reached with other markets under the Short and Long Term Arrangements Regarding International Trade in Cotton Textiles begin- ning in 1961. The year under review saw a significant change in the nature of both, and I might describe 1966-67 as a year of bilateral agreements.
United Kingdom
7. The negotiations relating to Hong Kong's trade in cotton textiles with the United Kingdom in the context of the latter's proposals to control imports from all so-called low-cost suppliers in the period 1966-1970 were held in Hong Kong in February, 1966 and interim arrangements were worked out. It was not until July, however, that definitive arrangements could be announced following consideration of the proposals at a meeting of the Cotton Textiles Committee in April.
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United States of America
8. Following acceptance of the basis for negotiations reached during exploratory discussions in the winter of 1965 on an American request for a comprehensive bilateral agreement covering all Hong Kong's exports of cotton textiles to the United States, substantive negotiations were held in Hong Kong in April. These resulted in an agreement covering a period of five years with retrospective effect from 1st October, 1965. Total trade in the first year was set at 359 million square yards equivalent, of which 36.6 million was a once-over allowance for that year.
9. Further consultations and negotiations were held in Washington during October and November relating to the emergence of a trade in polynosic/cotton blends, which were outside the scope of Hong Kong's export controls but were considered by the United States to fall within the terms of the bilateral agreement. (The two Governments were able to reach agreement at a further meeting in Washington in April, 1967).
Benelux
10. In all restraint agreements Hong Kong has sought to maintain the right to control exports as a quid pro quo for conceding restraint in order to retain the commercial bargaining power which goes with control by the supplier of goods which are in commercial demand. Although this principle was temporarily infringed when the Benelux Governments imposed import controls on two categories of cotton shirts in June, 1966, after further negotiation in Brussels in November, they agreed to a unilateral undertaking by Hong Kong to control exports up to 30th September, 1967.
Canada
11. Negotiations in Ottawa during October resulted in a two part agreement. On the one hand, Hong Kong agreed to continue for a further year the previous restraints on five categories of cotton garments; and on the other hand, a three year agreement covering the greater part of the trade in cotton fabrics was concluded.
Federal Republic of Germany
12. Negotiations for a bilateral cotton textile agreement took place in Hong Kong in December, 1966. This was the result of a request from the Federal Republic of Germany, which had been importing some 85% of Hong Kong's cotton textile exports to the European Economic
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Community. Agreement was reached on restraint of exports for the period from 1st November, 1966 to 31st December, 1969 in seven groups of cotton woven fabrics and garments, including nightwear which had already been under restraint for some years prior to the request.
13. The two year restraint agreement on exports of knitted woollen outerwear to the Federal Republic of Germany, concluded in January, 1966, was modified in the course of negotiations held in Hong Kong in July on the subject of exports via third countries. It was replaced and superceded by a three year agreement retrospective to January, 1967 concluded in Bonn in March.
France
14. France continued in 1966 the import restrictions on imports of cotton textiles from Hong Kong at an annual level of 325 metric tons. It was in fact possible to ship only some 50 metric tons, principally because controls are exercised at the import end. It was agreed at discussions in Paris during January that consultation on this trade should be held towards the end of 1967; and that, meanwhile, the restrictions should be continued in their present form for nine months at an annual level of 350 metric tons.
15. Outside the field of cotton textiles trade discussions with the French Government also took place in Paris in January. Minor conces- sions obtained included the liberalization of trade in plastic articles, fishnets, wireless spare parts, gramophones, and button blanks. Some quota increases were secured for the residual twenty six items still subject to control.
G.A.T.T. Cotton Textiles Committee-Renewal of the Long Term
Arrangement
16. With the exception of those with the United Kingdom and with the Federal Republic of Germany on woollen knitwear, the other agree- ments mentioned were negotiated under or were consistent with the provisions of the Long Term Arrangement Regarding International Trade in Cotton Textiles which came into force in October, 1962 for a period of five years. The terms of the Arrangement provided for the G.A.T.T. Cotton Textiles Committee to meet not later than one year before its expiry to consider its future and, as it transpired, a series of meetings, both inside and outside the Committee, were held from September, 1965 onwards before agreement in principle was finally
5
reached at the end of March, 1967 to extend the Arrangement, in virtually its present form, for three years. Hong Kong, represented mainly by Mr. HADDON-CAVE, Deputy Director (Commercial Relations), played a full and active part in these consultations.
Kennedy Round of Tariff Negotiations
17. The period under review saw greatly increased activity in the Kennedy Round of tariff negotiations. These negotiations had been initiated in 1964, but had fallen into a virtual torpor through 1965 and early 1966. With the clarification of the E.E.C. domestic position in 1966 and the impending termination in July, 1967 of U.S. negotiating authority under the Trade Expansion Act, the negotiations regained momentum. The United Kingdom Government confirmed to the Con- tracting Parties of the G.A.T.T. that they were also participating on behalf of those dependent territories in respect of whom they have provisionally accepted the General Agreement, which of course included Hong Kong. The department's new Geneva Office kept closely in touch with day-to-day developments in the later critical phases of the Round. The Overseas Trade Relations Branch continued to analyse both the tariff offers of Hong Kong's major markets and the work of the various groups considering non-tariff barriers, particularly the group deliberating on anti-dumping measures.
TRADE PROMOTION
Trade Development Council
18. In April, 1966 the department's Export Promotion Division was incorporated into a provisional Trade Development Office anticipat- ing incorporation of the Trade Development Council by ordinance, enacted in September. Finances for the Council come partly from general revenue and partly from an ad valorem levy on imports, exports and re-exports, provided for by legislation which came into effect in October.
19. The prime functions of the Council are to promote, assist and develop Hong Kong's overseas trade, with special emphasis on exports. In addition to this, it makes recommedations to Government on any measures which it considers would increase Hong Kong's trade.
20. The first Chairman of the Council is the Hon. Sir Sik-nin CHAU, C.B.E., J.P., and there are fourteen members, appointed by His Excellency the Governor, who are representative of the major trading
6
and commercial organizations, Government and the private sector. The Executive Director is Mr. R. G. L. OLIPHANT.
21. Five overseas offices are maintained, in New York, London, Brussels, Sydney and Nairobi, and the nucleus of the headquarters staff consists of the Export Promotion Division of the Commerce and Industry Department, on secondment, and the secretariat of the former Public Relations Joint Committee. The Display Centre of Hong Kong products, formerly in the City Hall, is now at the headquarters of the Council in the Ocean Terminal, and was formally opened by His Excellency the Governor in May, 1966. The Council also publishes the Trade Bulletin which has a circulation of over 23,000 per month, and is sent all over the world.
22. During the year, despite the change in organization, a full export promotion programme was undertaken. The Council took part in the Barcelona International Samples Fair in June; in September and November was represented at the St. Erik's Fair in Stockholm and the First Asian International Trade Fair in Bangkok. During September, department store displays were held in eleven cities in America, in London and in Stuttgart.
Export Credit Insurance
23. Working in their new offices under the Commissioner-designate, Mr. K. D. ROBERTSON, the staff of the embryo Export Credit Insurance Office, in conjunction with the department and Crown Counsel drafted the new legislation necessary to establish the office as an independent corporation appropriately funded and backed by Government. The Hong Kong Export Credit Insurance Corporation Ordinance was passed by Legislative Council and became law on 23rd December, 1966, when the corporation commenced business.
24. Mr. D. C. W. HILL, on temporary transfer from the Export Credits Guarantee Department of the Board of Trade, arrived in May to assume the post of Manager of the corporation. He put in hand a recruitment programme for executive staff; then organized a training course for those selected.
25. An Advisory Board was appointed on the enactment of the legislation. The Chairman of the Board is Mr. P. A. GRAHAM. Seven unofficial members of the Board were appointed by the Governor. The following are ex officio members: the Deputy Economic Secretary, the
7
Executive Director of the Trade Development Council and the Director of Commerce and Industry. The Board held three meetings during the period under review. In accordance with the provisions of the Ordinance, the Corporation will be issuing its own annual reports in future.
CERTIFICATION OF ORIGIN
26. Much work was done during the year in the important field of certification of origin. The department improved its system of issuing certificates and extended its liaison with foreign Governments in order to ensure that the Hong Kong certification system could continue to protect and assist exports of Hong Kong products. 60% of all domestic exports are supported by departmental origin or preference certificates, many of them issued under special procedures agreed with the importing countries. The departmental involvement in certification may be gauged by the fact that over 160 officers are employed in the certification branch and its inspection service. Over 400,000 certificates were issued during the year.
27. The department continued to work closely with the three non- Government organizations approved for the issue of certificates of origin, i.e. the Hong Kong General Chamber of Commerce, the Indian Chamber of Commerce and the Federation of Hong Kong Industries. A number of improvements on co-ordination with these bodies were undertaken and others were still under discussion at the end of the year.
28. With the emergence of new international trading blocs and the establishment of new trade preferences there seems little doubt that certification of origin will become increasingly important as a means of identifying the goods of one country from those of another. Hong Kong as a free port is particularly vulnerable to substitution and the department, in order to protect Hong Kong's legitimate trading interests overseas, has had to construct a complicated certification apparatus which will discourage malpractice and assist exports of Hong Kong products. The system now in use does this effectively.
INDUSTRIAL DEVELOPMENT
29. Serious staffing difficulties prevented the Industrial Development Branch from operating as effectively as I would have liked during the year. What it has been able to do with limited resources has however been done well.
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Health and Safety Standards
30. The branch has been most effective in the field of health and safety standards. A number of overseas complaints alleging health and safety hazards in local products, many in respect of toys and electrical apparatus, were fully investigated in co-operation with the Hong Kong Government Office in London. Manufacturers co-operated fully in rectifying faults in design and materials. The branch organized a random inspection and testing scheme to ensure that paints used by Hong Kong toy factories are safe for children. The Federation of Hong Kong Industries also established a testing and certification service to carry out lead tests in paints and plastic materials.
Industrial Land
31. The branch assisted where necessary with the development and implementation of official land policy and represented the interests of various sectors of industry. This is an expanding area of responsibility and I am glad to record that industrialists bring their problems to the department confident that they will be patiently studied and realistically evaluated.
Foreign Investment
32. The department has now accepted responsibility for the co- ordination of all enquiries relating to overseas financial participation in Hong Kong industrial development. It had been found that in many cases enquiries regarding ‘joint ventures', the establishment of wholly owned subsidiaries and licensing arrangements had resulted in duplica- tion of effort by the department and local trade and industrial organiza- tions. A meeting of interested parties resulted in agreement to co-ordinate this work. This should provide a more efficient system for dealing with these important enquiries.
33. The department has had to accept an increasing work commit- ment with regard to the briefing of delegates to, and attendance at, meetings of various committees of the Economic Commission for Asia and Far East and the Asian Productivity Organization. Limited staff resources have had to be diverted from projects with lower priority to service the Hong Kong delegations and provide these regional organiza- tions with information on Hong Kong industry.
9
34. With the continuing rapid development of Hong Kong's export markets of domestic manufactures in an atmosphere of ever increasing international competition, there is no doubt that many new industrial problems are emerging. Hard work and greater skill will be needed to overcome them. The Industrial Development Branch continues to remain in close contact with industry and the various industrial associations and is ready when necessary to assist in dealing with the new problems to which this increasing competition gives rise. However it must be recognized that many of these problems must finally be resolved by improved organization within industries and firms themselves. It was to bring about such general improvements that the Productivity Council was established.
Hong Kong Productivity Council
35. In April the interim secretariat of the Provisional Productivity Council moved into separate premises in Gloucester Building to direct initial operations, which included recruitment of key staff for the Centre, drafting of legislation to establish a statutory Productivity Council and Productivity Centre, and logistic arrangements for Hong Kong's participation in Asian Productivity Organization projects. In October after a widespread recruiting campaign organized by the department, Mr. W. H. NEWTON was appointed Executive Director (Designate) of the projected Productivity Centre.
36. Draft legislation for the establishment of the Productivity Council was completed towards the end of 1966, and on 21st December I introduced the Hong Kong Productivity Council Bill into the Legisla- tive Council. It became law on 20th January, 1967.
37. The Productivity Council comprises a chairman and twenty members, of whom ten members represent management, labour, pro- fessional and academic interests, while the remaining ten represent Government departments closely associated with productivity matters. The Chairman and Members of the Council are appointed by the Governor. The first appointments to the Council and my own appoint- ment as Chairman were gazetted on 17th March. The inaugural meeting of the Productivity Council was held on 22nd March. Resolutions passed at this meeting included the election of a 9-member Executive Committee with Dr. S. Y. CHUNG as Chairman to manage the Produc- tivity Centre, the executive arm of the Council. The Productivity Council will in future be making its own annual report.
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Industrial Production Statistics
38. Quarterly textile production statistics continued to be collected from cotton and wool spinning mills, cotton and silk/rayon weaving mills and carpet weaving and tufting mills registered with the department. Considerable improvements in response and coverage were made during the year.
39. The Sub-committee on Industrial Production Statistics appointed by the Trade and Industry Advisory Board in March, 1966 submitted a report in March, 1967. The proposed scheme envisaged firstly the development in scope and coverage of the existing production statistics and secondly the laying of foundations for a census of industrial estab- lishments in 1970 or 1971. The United Nations' recommendations in respect of industrial statistics were to be followed as far as feasible.
PREVENTIVE SERVICE AND REVENUE
Dutiable Commodities
40. Net revenue collected from dutiable commodities during the financial year showed an overall increase of 21.1% compared with the previous year. Each of the five categories of dutiable commodities con- tributed, but the largest increases were in respect of tobacco and hydro- carbon oils, reflecting in the main duty increases on 24th February, 1966 of $2 per lb. for all types of tobacco, and 30 cents per gallon for motor spirit and diesel oil for road vehicles other than public buses. Revenue from dutiable commodities amounts to about 16% of the total general revenue. Net revenue from intoxicating liquors showed an 11% increase over the previous year with consumption of almost all types of liquor up, the exception being locally manufactured Chinese type spirits which suffered as a result of competition from imports from China.
41. Protection of the revenue collected from dutiable commodities is the responsibility of the Preventive Service and during the early part of 1967, seizures of illicit stills showed a marked increase, particularly in the Kowloon area, underlining the fact that illicit distilling is a highly organized and, if undetected, profitable business. During the year some concern was also felt at the increasing evidence of the use of industrial diesel oil in road vehicles. A switch of emphasis by Preventive Service excise teams from checking oil in the tanks of vehicles, to tracking down the sources of industrial oil from which the dye had been removed, led to a high seizure rate, again in the Kowloon area.
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Narcotics
42. The regular meetings held between the Preventive Service and the Police Narcotics Bureau were formalized by the setting up of a Sub-Committee of the Action Committee against Narcotics (A.C.A.N.) with representatives of both Services on it; a representative of the Preventive Service also sits on the A.C.A.N. itself. The Service made 88 separate seizures of narcotic drugs, the largest single seizure being 405.59 lbs. of raw opium.
New Quarters
43. On 28th June, 1966, Mr. LUDDINGTON, then acting Commissioner of the Preventive Service, formally opened the new Rank and File Married Quarters at King's Road, North Point. This building provides a total of 121 quarters for rank and file members of the Preventive Service. A Residents Committee was set up to deal with any problems concerning the quarters. During the year a further project to build 220 quarters in Kowloon for rank and file Preventive Service officers was included in the Public Works Programme.
MISCELLANEOUS
Rice
44. Insofar as rice supplies were concerned the main event during the year was the ban on rice exports imposed by the Thai Government in November 1966. Thailand has traditionally been the principal source of supply for Hong Kong during the past two decades, and so the ban caused some concern in Hong Kong. Since the middle of 1966 there had been anxiety about the supply position and rising prices, and steps had been taken to build up stocks against an emergency. It was, therefore, possible to allay the fears of the public when the ban occurred by pointing out that stocks were sufficient for at least three months. This had the effect of checking the rapid rise in retail prices, although high import prices and increased demand did result in substantial increases. Supply from Thailand was resumed by the end of January and in February I was able to state in Legislative Council that the rice control scheme had survived a severe test and had proved its worth, both as an insurance against shortage and also as buffer against violent fluctua- tions in the retail price of rice to local consumers.
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Consumer Price Index
45. Movements in the retail prices of goods and charges for services usually purchased by households in Hong Kong have been measured and kept under review by the monthly calculation of price indices and by a series of continuing monthly household expenditure surveys. The monthly sample surveys of household expenditure provide a check on the adequacy, in relation to the current period, of the expenditure patterns used as the bases of the Consumer Price Indices. The general average trend of prices has been a moderate rise. More detail is given in paragraphs 294-304.
Ad Valorem Charges on Trade Declarations
46. In order to raise each year some seven million dollars to provide over half the income required by the newly established Trade Develop- ment Council, new regulations were introduced in October, 1966 imposing an ad valorem charge on import, export and re-export declara- tions. Up to March, 1967 $4.4 million had been collected. In the first few months, the enforcement of the regulations led to an unusually large number of declarations being lodged and consequently to the trade figures being somewhat distorted in comparison with earlier months or years. However, the existence of these regulations has enabled improvements to be made in the prompt lodging of trade declarations and in the coverage of the trade statistics.
ADMINISTRATION
Change of Director
47. The Honourable D. R. HOLMES, C.B.E., M.C., E.D., who had been Director of Commerce and Industry since August, 1962, was appointed Secretary for Chinese Affairs in November, when I succeeded him.
Departmental Organization
48. The period under review saw important changes in the depart- mental organization structure. At the beginning of the year the Export Promotion Division of the department became the nucleus of the newly formed Trade Development Council and the Deputy Director, Trade and Industry, assumed direct responsibility for the Overseas Trade Relations Branch. The Textiles Branch has become the sole respon- sibility of one Assistant Director, and another Assistant Director took
13
control of the Certification and Industry Inspection Branches. With the establishment of two new overseas offices in Geneva and Washington late in the year, and the formal establishment of the Trade Development Council, the Export Credit Insurance Corporation and the Hong Kong Productivity Council as statutory organizations, further organizational changes became necessary which led to one Deputy Director being given responsibility of all matters concerning Administration and Industry (including Certification) and the placing of responsibility for commercial relations in general under the other deputy.
Establishment and Strength
49. At the start of the year the department's authorized establish- ment stood at 1,415 posts, 737 of them in the Preventive Service. Vacancies in the civilian and Preventive Service establishments were 100 and 128 respectively. Two additional civilian and seventeen additional Preventive Service posts were approved during the year. On 31st March the staff deficiencies were 27 civilian posts and 168 Preventive Service posts, the bulk of the latter being new Marine Section posts.
Office Accommodation
50. The move of the Secretariat for Chinese Affairs from the first floor of the Fire Brigade Building to alternative premises allowed for much needed additional office accommodation to relieve over-crowding and to bring back to the department outlying offices which were essentially part of the headquarters. This long overdue rationalization has contributed to the efficiency and effectiveness of the department.
Advisory Boards
51. The terms of reference of the Trade and Industry Advisory Board are '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 broad terms of reference, the Board's advice was sought on a great variety of subjects. But this year the Board had no longer to concern itself with an export promotion programme, now dealt with by the Trade Development Council. This ten-member board under my chairmanship met on thirteen occasions during the year. At the end of the year, Dr. S. Y. CHUNG, Ph.D., J.P., the Hon. J. DICKSON-LEACH, O.B.E., J.P., and Mr. Lambert KwOK stood down, and were replaced by the Hon. P. Y. TANG, J.P., Mr. H. J. C. BROWNE, J.P. and Mr. K. S. Lo, J.P.
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52. The terms of reference of the Cotton Advisory Board are 'to advise on any matter which directly affects the cotton industry in Hong Kong'. Like the Trade and Industry Advisory Board, all thirteen members, apart from myself as Chairman ex officio, are unofficials. The Board is particularly concerned with advising the Director on the conduct of negotiations and the implementation of agreements. It met thirty times during the year. In addition, groups of members accom- panied official delegations to overseas negotiations on five occasions, which involved absences of several weeks for those concerned. At the end of the year, four members of the Board stood down after combined service in excess of twenty years. They were the Hon. P. Y. TANG, J.P., and Messrs. H. T. LIU, H. J. SHEN and Elmer J. S. Tsu, J.P. They were replaced by Messrs. M. CURRAN, Y. C. WANG, David Z. D. Woo, and William T. L. YAO.
53. My predecessor and I have been keenly aware of the value of these two boards and of the debt we owe to the members both past and present. Considerable time and effort is required to study and master the many detailed papers referred to them. The department benefits from the mature and varied experience which they bring to every meeting.
Conclusion
54. What has been achieved is the result of hard work and willing co-operation by the staff of the civilian branches and of the uniformed Preventive Service for which I am deeply grateful. A more detailed record of this work is contained in the succeeding chapters of this report and in its appendices.
II. OVERSEAS TRADE RELATIONS BRANCH
INTERNATIONAL INSTITUTIONS AND DEVELOPMENTS
General Agreement on Tariffs and Trade
55. The period under review saw greatly increased activity in the Kennedy Round of trade negotiations. These negotiations had been initiated in 1964, but through a variety of reasons, had fallen into a virtual torpor by 1965 and early 1966. With the clarification of the E.E.C. domestic position in 1966 and the impending termination of U.S. negotiating authority under the Trade Expansion Act by July 1967, the Kennedy Round negotiations resumed momentum. The United Kingdom Government confirmed to the Contracting Parties of the G.A.T.T. that
15
it was also participating in the Kennedy Round on behalf of those dependent territories in respect of whom it had provisionally accepted the General Agreement. This of course included Hong Kong. The opening of a Hong Kong office in January 1967 in Geneva (See para- graph (120)), was opportune in that it enabled the department to be kept closely in touch with day-to-day developments in the most critical phase of the Round. The Overseas Trade Relations Branch analysed both the tariff offers of Hong Kong's major markets and the work of the various groups considering non-tariff barriers, particularly the deliberations of the one on anti-dumping measures.
56. In the meantime, discussions in G.A.T.T. regarding a global system of tariff preferences for developing countries continued. As in the past, no concrete proposals have been formulated, although discus- sions have thrown up two aspects: tariff preferences by developed countries to developing countries, and the possibility of preferences among developing countries themselves.
57. The annual plenary session of the G.A.T.T., normally held in March/April each year, was postponed to the early autumn of 1967 to enable the Contracting Parties to assess the final results of the Kennedy Round.
58. During the year, an Assistant Trade Officer attended a four and a half month in-service training course on commercial policy with the G.A.T.T. Secretariat in Geneva. He was the third officer sent by the Department on this course.
The Organization for Economic Co-operation and Development
59. Apart from discussions in the G.A.T.T. and U.N.C.T.A.D. (see para. 120) on the subject of tariff preferences for developing countries, discussions took place in the O.E.C.D. The latter set up a Special Group concerned with problems in trade with developing countries, and in particular, the problem of preferences, and while, as in G.A.T.T. and in U.N.C.T.A.D. the Group have not reached any definite conclusions, they are in the process of examining certain proposals (albeit couched in general terms) towards implementation of such preferences. The department is following and analysing developments.
Man-made fibre and wool textiles
60. The Overseas Trade Relations Branch has followed international developments affecting trade in textiles other than cotton. The possibility
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of international agreements on the lines of the Long Term Arrangement regarding Trade in Cotton Textiles may be resurrected once the Kennedy Round is over.
U.N. Economic Commission for Asia and the Far East
61. Mr. Y. H. KAN, headed the Hong Kong delegation to the Tenth Session of the Committee on Trade, held in Bangkok from 3rd to 16th February, 1967. He was accompanied by two officers of the depart- ment as alternative delegate and as secretary.
62. The delegation commented that a greater identity of interests between Hong Kong and other countries of the ECAFE region may be developing, and recommended, inter alia, that Hong Kong should continue to participate in the Committee on Trade.
INDIVIDUAL COUNTRIES
Australia
63. In April 1966 the Australian Government announced that, pending an investigation by the Australian Tariff Board, anti-dumping cash securities would be imposed on cotton knitted shirts and blouses from Hong Kong and Mainland China when export prices were lower than the 'normal values' fixed by the Australian Customs and Excise Department. This move was made as a result of a complaint to the Australian Ministry of Customs and Excise in September 1965, and despite the department's efforts to refute the allegations. Having regard to the serious implications of this action, the Trade and Industry Advisory Board advised that Hong Kong should be represented at the Tariff Board hearing. This took place at Melbourne in December 1966 and Hong Kong was represented by an Australian firm of trade con- sultants acting on behalf of the Trade Development Council. An officer from the department also attended the hearing as an observer. The results of the hearing had not been published by the end of the year under review.
Austria
64. Formal discussions with the Austrian Government on anti- dumping legislation affecting the import of woollen knitted outerwear from Hong Kong into Austria took place in Vienna in November 1966. The Austrian Government intimated that they were at present unwilling to dispense with the anti-dumping measures even though the effect of
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imports on Austrian industry had been contained. The relevant legisla- tion had been reserved for a further twelve months. There is however no evidence that this legislation has had any deleterious effect on Hong Kong's trade with Austria in the items affected.
France
65. Trade discussions with France took place in Paris in January 1967. Whilst maintaining the existing import controls despite formal protests from Hong Kong, some minor concessions were made by the French Government which included the complete liberalization of plastic articles, fishnets, wireless spare parts, gramophones and button blanks. The 1967 annual quota increases for the 26 items still subject to import control were worth N.F. 1.021 million, plus an increase of 2,000 pairs of rubber boots, 2,000 radios, and 25,000 umbrellas, open to import licence application.
Federal Republic of Germany
66. Following a request from the Federal German Government, consultations were held in Bonn in March 1967 to consider the question of Hong Kong's trade in woollen knitwear with the Federal German Republic for the three years from 1st January, 1967 to 31st December, 1969.
67. The Federal German Government had felt obliged, because of the prevailing market situation and the general economic situation in the Federal Republic of Germany, to ask for these consultations on the basis of the consultation clause contained in the agreement reached in Bonn in January 1966 relating to the limitation by Hong Kong of exports of woollen outerwear in 1967.
68. A new agreement provides for Hong Kong to restrain exports to 825,000 dozens in 1967, 875,000 dozens in 1968, and 925,000 dozens in 1969. In addition, carryover rights of 3% of the limits between one year and another were secured.
Malaysia and Singapore
69. In August 1966 the Government of Malaysia amended their customs tariff by increasing the Commonwealth preference duties to the full most-favoured-nation rate for a large number of items. As a result, Hong Kong lost preference on trade worth HK$43 million a year
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in terms of the 1965 figures. Increases in duty ranged from 71% to 15% ad valorem: the items most seriously affected were cotton fabrics, textile garments, and refined sugar.
70. In January 1966 the Singapore Government also removed the previous Commonwealth preference granted on imports of refined sugar, resulting in Hong Kong's losing in preference on trade worth HK$5.7 million in 1966.
71. These moves were not incompatible with Malaysia's and Singapore's international or Commonwealth obligations, and little could therefore be done in the way of representations.
Nigeria
72. The specific import licensing restrictions imposed by the Nigerian Government in August 1965 on all Hong Kong imports remained in force. The uncertain political situation in Nigeria has hampered progress, but the Department have made repeated efforts to press formally for their removal.
Republic of South Africa
73. The South African Government continued to impose anti- dumping duties on a wide range of imports from Hong Kong. Following further representations from Hong Kong, the South African Government has agreed to carry out a review of the situation.
Sudan
74. Towards the end of 1965 a total ban was imposed by the Sudanese Government on Hong Kong imports, allegedly owing to the large imbalance of trade between the two territories. In spite of repeated formal representations to the Sudanese authorities, this ban still remains in force.
United States of America
75. In mid-September 1966, the United
United States Government announced a proposed amendment to the country's Wool Products Labelling Act which, if established, would enable foreign governments to send samples of imported woollen knitwear for testing and certifying the correctness of the fibre content declared on the label attached to the garments.
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76. Subsequent to an enquiry by the Federal Trade Commission to decide whether the proposed scheme should be implemented, the United States Government took up a suggestion from Japan to investigate the possibility of putting the onus on exporting countries to test and certify their woollen exports to America. Hong Kong was asked to supply information in this connection and replied with advice of the Technical College and the Federation of Hong Kong Industries. The results of the investigation were still awaited at the end of the year under review.
77. As reported in paragraph (125) Mr. A. H. B. HERMANN of the British Diplomatic Service was appointed, in January 1967, to the post of Counsellor, Hong Kong Commercial Affairs at the British Embassy, Washington. Mr. HERMANN is the first holder of this post.
Country Pamphlets
78. During the year, the Division issued five country pamphlets on Kenya, Finland, Canada, Venezuela, Mexico; the texts of a further twelve, namely on Spain, Peru, Irish Republic, Sweden, Norway, Brazil, Denmark, Uganda, Belgium and Luxemburg, Italy, South Africa and Austria were completed and forwarded to the relevant British posts abroad for checking. These pamphlets are designed to assist Hong Kong businessmen interested in trade with the territories concerned by provid- ing background information of a general nature and their political and commercial position with direct reference to their trading arrangements with Hong Kong. The pamphlets are available free of charge from commercial and industrial associations in the Colony.
III. TEXTILES DIVISION
THE G.A.T.T. LONG TERM ARRANGEMENT REGARDING
INTERNATIONAL TRADE IN COTTON TEXTILES
79. 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, the Benelux Countries and, for a brief period, Italy have requested Hong Kong to restrain exports to their respective countries
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in a number of cotton textile categories. The Textiles Division has been responsible for preparing for negotiations on these requests and for the operation of the consequent controls when restraint has been agreed.
80. The agreed export restraint levels together with actual shipment performance for the first five Long Term Arrangement years as well as for the preceding Short Term Arrangement year are shown in Table 1. For certain garment and made-up categories, the restraint levels have been converted into equivalent square yards to facilitate comparisons.
81. The G.A.T.T. Cotton Textiles Committee held a series of meet- ings in Geneva during the period from September, 1966 to March, 1967 to consider the future of the Long Term Arrangement. Article 8(d) of the Arrangement required the Committee to meet not later than one year before the expiry date of 30th September, 1967, for this purpose, but the process of reaching agreement proved more protracted than originally envisaged.
82. A series of bilateral meetings between the principal importing and exporting countries were held and the Committee eventually decided in March to extend the Arrangement, in substantially the same form as at present, for three years from the date of its expiry. Throughout these Cotton Textiles Committee meetings, Hong Kong was represented by the Deputy Director (Commercial Relations), who was assisted in March by the newly-appointed Counsellor, Hong Kong Affairs, United Kingdom Mission in Geneva, and advisers from the textile industry.
EXPORTS OF COTTON MANUFACTURES TO BRITAIN
83. The interim arrangements for 1966 continued until the agree- ment provisionally reached with officials of the Board of Trade in February was finalized in May, when the British Government completed its global quota arrangements with other exporting countries for the period 1966-70. Under these arrangements Hong Kong had a 1966 aggregate limit of 185 million square yards for cotton woven fabrics, made-ups and garments, 6.3 million lbs. for cotton yarns, and a further 2.3 million square yards in respect of a number of cotton manufactures which were not restricted under the 1963-65 Undertaking. A growth factor of 1% per annum was agreed for subsequent years. It was also agreed that an additional 84% of the overall, group and category limits could be shipped at any time during one year, subject to a like amount being deducted from the corresponding limits for the following year.
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was also reached to hold further negotiations for liberalization of some of the terms of the bilateral agreement, once both Governments were assured of the extension of the Long Term Arrangement.
87. The first annual review of the bilateral agreement took place in Washington from 18th to 22nd October. The Hong Kong team returned to Washington to hold further consultations with the American authori- ties from 15th to 17th November on certain issues which were raised during the annual review relating to the definition of cotton textiles under Article 9 of the Long Term Arrangement. During the Geneva meeting of the Cotton Textiles Committee in March, 1967, U.S. officials had further discussions with the Hong Kong delegation and requested consultations on this issue, together with the negotiations for the liberalization of the bilateral agreement, in Washington in the follow- ing month.
88. The buoyant U.S. textiles market maintained its strong demand into the second half of the 4th Long Term year (i.e. first year of the bilateral agreement) ending 30th September, 1966. As a result, shipment of cotton textiles reached 98% of the aggregate limit. Exports in the first half of the second bilateral year proceeded at a steady pace. By the end of March, 1967, 43% of the aggregate limit had been shipped.
Canada
EXPORT OF COTTON MANUFACTURES TO OTHER COUNTRIES
89. As a result of negotiations held in Ottawa in October, 1966, Hong Kong undertook to continue to restrain the export of certain cotton textiles under the provisions of the Long Term Arrangement regarding international trade in cotton textiles. The agreement was in two parts:
(a) Apparel
The first part provided for an extension of the previous restraint, under Article 3 of the Long Term Arrangement, on five categories of cotton apparel for one year from 1st October, 1966, on the same terms and conditions as in 1965-66, with the introduction of two additional sub-limits for children's wear in two categories cotton woven shirts and cotton woven blouses. (b) Fabrics
The second part contained an overall agreement on cotton fabrics, negotiated consistent with Article 4 of the Long Term Arrangement, for a period of three years from 1st October, 1966.
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This overall agreement provided for an annual group limit of 11.09 million square yards, within which there were five specific limits, but excluded certain categories of fabrics.
The combined limits for both groups totalled 26.6 million equivalent square yards.
Federal Republic of Germany
90. In October, 1966 the Federal German authorities requested consultations regarding six broad groups of cotton textiles. This was additional to the continued restriction on export of nightwear which had been provisionally fixed at a level of 400,000 dozens for the 5th Long Term year. After preliminary consultations in Bonn in November, negotiations took place in Hong Kong in December, resulting in an agreement whereby Hong Kong's exports in seven groups of cotton woven textiles, including nightwear, would be restrained for the period from 1st November, 1966 to 31st December, 1969. The trade affected represented approximately two thirds of the Colony's exports of cotton textiles to the Federal Republic.
91. The limit for the first restraint period, covering 14 months from 1st November, 1966, was 77 million square yards. A complicating factor during this period was that due allowance had to be made for the obligation imposed on the Federal German authorities by their Foreign Trade Law to license imports against contracts registered with them in response to their Gazette notice of 29th October, 1966 announcing the imposition of import controls pending the consultations. Although the bilateral agreement provided for export control by Hong Kong, quota could only be calculated by deducting from the agreed limits for the first period all such contracts. An officer from the department visited Frankfurt in early January to examine these contracts and calculate appropriate deductions. These were finally agreed during consultations held in Bonn in March when certain matters regarding the implementa- tion of the agreement were also discussed. In the interim period, trade continued to flow against contracts entered into before 29th October and registered accordingly.
92. Quota was allocated on 20th March and thereafter shipments of the restrained items were made against both quota and registered
contracts.
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Norway
93. The bilateral agreement negotiated with Norway in 1962, in accordance with which restraint was exercised on two categories of garments, viz. nightwear and shirts for work, leisure and sport, entered its last year on 1st October, 1966. The limits for nightwear and shirts for the 5th Long Term year were 23,000 dozens and 66,000 dozens respectively. Preliminary discussions regarding the future of the agree- ment, in conjunction with those regarding the extension of the Long Term Arrangement, were continuing at the end of the year under review.
Benelux
94. In the course of protracted negotiations on their request for export restraint to be imposed by Hong Kong, certain differences prompted the Benelux authorities to introduce import restrictions on two categories of cotton woven shirts in June 1966. These differences were resolved in Brussels in November and a unilateral undertaking was given by Hong Kong to limit exports of cotton woven shirts to a total of 900,000 pieces from 1st January, 1967 to 30th September, 1967.
WOOLLEN KNITWEAR EXPORTS
95. Exports of the three categories of woollen knitted outerwear under restraint to the Federal Republic of Germany in 1966 reached 848,403 dozens, which fell short of the restraint limit of 875,000 dozens by 26,597 dozens.
96. In May, 1966, the German authorities suggested that the effec- tiveness of the two year agreement reached in January, 1966 governing exports of woollen knitted outerwear was being prejudiced by imports of Hong Kong origin goods via third countries. Consultations were subsequently held in Hong Kong from 27th to 30th July between representatives of the Hong Kong and German governments, culminating in the conclusion of a supplementary agreement to take account of this trade.
97. The supplementary agreement, together with the original two year agreement it modified, were, however, superseded as a result of consultations held in Bonn in March 1967 at the request of the Federal government. These resulted in the conclusion of a new agreement covering the three calendar years from 1967 to 1969. Replacing that part of the earlier agreement in respect of 1967, it provided for Hong Kong
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to limit exports in the same three categories of woollen knitted outerwear to 825,000 dozens in 1967, 875,000 dozens in 1968 and 925,000 dozens in 1969. Provision of 3% carryover rights was included.
98. The Wool Committee of the Trade and Industry Advisory Board, which was formed in January, 1966, met on four occasions to consider matters in connection with the July consultations with the German authorities, the likely trend of exports in 1967 and the intro- duction of an incentive scheme to encourage the installation of full- fashioned automatic machines.
IV. OVERSEAS OFFICES
LONDON OFFICE
General
99. An important task of the London Office during the year has been to establish with the Commonwealth Office the important personal links which previously existed with the staff of the Colonial Office.
100. The close and friendly contact which has been established between the Office and the Board of Trade was maintained, particularly over matters concerning the cotton textiles quota controls.
Trade Relations
101. The office also has a part to play in the field of international negotiations affecting Hong Kong trade. It proved useful to the Deputy Director (Commercial Relations) both as a base for establishing contact with various members of British Government Departments and as a support and servicing office during this frequent visits to Europe and North America to discuss and negotiate various cotton textiles agree- ments. The services of the Office were also used by His Excellency the Governor, the Financial Secretary and various Heads of Departments.
102. During the year the Director of the London Office attended a number of meetings concerned with international trading matters affect- ing the Colony. He accompanied the Financial Secretary to talks in Geneva on the G.A.T.T., Cotton Textile arrangements. He accompanied the Director and Deputy Director of Commerce and Industry to the Commonwealth Trade Officials Meeting at Marlborough House. He also represented the Colony at the meetings of Commonwealth Finance Officials at Marlborough House.
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103. The main internal task of the London Office during the year was to ensure the smooth separation of the Government Office proper and the newly established London Office of the Trade Development Council and to plan means whereby the Trade Development Council could operate in selfcontained premises of its own at 55-58, Pall Mall by the official vesting date of the Council on 1st October, 1966. In the event, the planning and subsequent building of the extra offices needed in 54, Pall Mall in order to accommodate the entire Government Office staff in the one building took longer than expected and, in fact, by the end of the year under review, although the two offices were functioning as separate entities, the physical move had still not been effected. However the Hong Kong Students Unit was able to find alternative accommodation and on 1st December, 1966 the Unit moved into its new offices in Abbey House, Victoria Street. Work on the conversion of the ground floor of 54, Pall Mall from a display area into a Library and Offices for the Government Office Information Section began early in 1967 and by the end of March, was nearing completion.
Public Relations and Liaison with Trade Development Council
104. The Office was represented by the Director or the Senior Trade Officer at all the meetings held monthly by the Committee of the Hong Kong Association. In addition, the Principal Information Officer served on a special Sub-Committee of the Association to plan the utilization of the Trade Centre in the basement of 55-58, Pall Mall, which was from the beginning of the period under review administered by the London Office of the Hong Kong Trade Development Council.
105. During the year under review, the public relations problems arising out of press reports of allegedly unsafe and unhygienic Hong Kong products-especially toys-took up a considerable part of the Principal Information Officer's time. A campaign to counteract adverse publicity shortly before Christmas achieved considerable success. The Principal Information Officer represented the Hong Kong Government on the Technical Committee charged with responsibility for revising the British Standards Code of Safety Requirements for Children's Toys and Playthings, and at two conferences called by the Consumer Council to discuss the question of unsafe toys.
106. Window displays at 54, Pall Mall during the year were changed frequently and included features on the Hong Kong Annual Report for 1965, Housing and Resettlement, the Plover Cove Water Scheme, Sport
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and Recreation, Motor Traffic and Parking, Medical Services, ‘British Institutions' in Hong Kong, Civil Aviation, Reclamation and Land Utilization, and the Colony's 1967-68 Budget.
107. In July 1966, the Information Section took over the Parlia- mentary Information Services from Messrs. Campbell-Johnson Limited. By the end of the year, 106 items of parliamentary information concern- ing Hong Kong were distributed to Hong Kong Government Depart- ments and a number of business organizations in Britain.
108. More than 200 press releases, complied from material received from the Information Services Department, were issued during the year, as part of a continuing effort to keep the British public informed about Hong Kong and its achievements. These resulted in a considerable number of news stories and articles being published in newspapers and magazines.
109. Twelve British Press Surveys (a digest of what the British press had been 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 the Colony. It also provides material for inclusion in a monthly programme produced by the B.B.C. for Radio Hong Kong.
110. The Information Section runs a small film library from which loans are made to schools, clubs and other private audiences. It also holds a stock of several thousand black-and-white photographs and colour transparencies and these were in constant demand for reproduc- tion by newspapers, magazines and publishing houses, as well as by authors, free-lance journalists, lecturers, commercial publicity agencies and broadcasting organizations.
Hong Kong House
111. The Office continued to assist the Board of Governors and the House Warden in the administration of Hong Kong House. Much time was devoted to such questions as estimates of income and expenditure and the many administrative problems which arose during the year. Three meetings of the Board of Governors and one meeting of the Executive Committee were held during the year. Frequent discussions took place between the Director, the Chairman of the Board of Governors and the Warden over a whole range of matters connected with the running of the House.
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BRUSSELS OFFICE
Staff and Accommodation
112. During this, its first full year of operation, the Brussels office settled down in the accommodation which had been leased in the same building as the British Embassy.
113. Experience showed that the level of staffing attained the previous year was adequate. It consisted of the Assistant Director, accredited as a Counsellor of the British Embassy; the Trade Officer, accredited as a Second Secretary of the Embassy; two secretaries and one clerk.
General
114. During May the Assistant Director, Brussels, the Trade Officer and their wives were presented to the Queen and Prince Philip during the visit of Her Majesty and His Royal Highness to Brussels.
115. A number of officers of the Department visited the office and arrangements were made for them to meet the British Ambassador and various officials of the Common Market organizations and representa- tives of the Belgian government. The office also provided support for delegation visiting other European capitals.
116. The Assistant Director visited Hong Kong in May for consulta- tions with various Hong Kong Government officers.
Trade Negotiations
117. The Assistant Director and the Trade Officer assisted at a number of negotiations and discussions including several negotiations held in Bonn and Frankfurt on the subjects of trade in cotton textiles and woollen knitted outer-wear with the Federal Republic of Germany; negotiations held in Brussels with the Benelux Governments on the subject of trade in cotton woven shirts; discussions held in Paris on the subject of Hong Kong/French trade; negotiations held in Geneva and Brussels with the European Economic Community relating to the extension of the Long Term Arrangement on Cotton Textiles; and a meeting of the Cotton Textiles Committee of the G.A.T.T. in Geneva. The office supplied secretarial assistance at some of these negotiations.
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Commercial Relations
118. The Assistant Director also visited Rome, Paris, The Hague, Amsterdam and Luxembourg during the year in order to meet officials of the various British Embassies and national governments concerned, members of trade organizations and businessmen trading with Hong Kong. Useful discussions were held on various economic and commercial matters during these visits. The Trade Officer made visits to The Hague and Amsterdam in order to hold discussions on a number of specific trading problems.
119. The office continued to fulfil its main function of watching closely economic and political developments in the European Common Market and of making and maintaining contact with Commission and Council officials and representatives of various countries, reporting all developments regularly to the Department.
GENEVA OFFICE
General and Opening of Office
120. The main reason for the establishment of the Geneva Office was to maintain contact with the international organizations dealing with trade relations, the General Agreement on Tariffs and Trade (GATT) and the United Nations Conference on Trade and Development (UNCTAD) which have their secretariats in Geneva. The Long Term Arrangement regulating international trade in cotton textiles is also administered under the G.A.T.T. In addition, Geneva is the seat of the European Free Trade Association (EFTA), of which the United Kingdom is a member.
121. In recent years it has become increasingly apparent that deci- sions were being taken under the auspices of these organizations in Geneva which were of vital importance for Hong Kong's trade relations and that, in general, it was in Hong Kong's interest to follow closely the work of these bodies. As a consequence officials from Hong Kong have had to pay more and more frequent visits to Geneva to attend meetings of these bodies. The establishment of an Office in Geneva, would enable a closer watch to be kept on day to day developments, and, when a delegation from Hong Kong was necessary, would provide the delegation with a base from which they could work more effectively.
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122. The Office was opened on 30th January, 1967 with the arrival from London of Mr. D. J. C. JONES, formerly a Principal in the Economic Department of the Colonial Office and later of the Common- wealth Office, to take up the post of Counsellor (Hong Kong Affairs) in the United Kingdom Mission (with the Hong Kong designation of Assistant Director, Commerce and Industry, Geneva Office). The estab- lishment consists of one Assistant Director and one Secretary/Personal Assistant posted from London by the Diplomatic Service.
Work of the Office
123. During the two months between then and the end of the Financial Year much of the Assistant Director's time was inevitably occupied with setting up and organizing the Office, arranging proper links with the rest of the United Kingdom Mission and establishing lines of communication with Hong Kong and also with making contacts with members of Missions from other countries and with the Secretariat of International Trade Organizations. Nevertheless work was going on at that time in the G.A.T.T. which was of importance to Hong Kong and which required immediate attention. (See paragraphs (55-56) above).
WASHINGTON OFFICE
124. In May 1966 it was decided that the volume of Hong Kong's exports to the United States, and the frequency with which commercial problems required intervention on behalf of Hong Kong by the British Embassy in Washington, justified the appointment of an officer to be responsible, under the Ambassador, for Hong Kong's commercial rela- tions with the United States Government. Her Majesty's Goverment were consequently requested to supply a suitable officer, of Counsellor rank.
125. Mr. A. HERMANN, a Diplomatic Service Officer, was in due course appointed and attached to the British Embassy as Counsellor for Hong Kong Commercial Affairs. For local administrative purposes he is regarded as an Assistant Director of Commerce and Industry in Washington.
126. Before taking up his duties in Washington, Mr. HERMANN visited Hong Kong from 8th January to 3rd February, 1967 to familiarize himself with the workings of the Department and with Hong Kong's commercial situation and problems. He had meetings with representatives of Government Departments, staff of the Trade Development Council,
31
and personalities in the major industrial and commercial organizations, and toured factories of all sizes in order to see Hong Kong's industries at work. He arrived in Washington on 6th February.
127. The Washington Office, which consists of the Assistant Director and a Secretary on loan from the British Embassy staff, is located within the Commercial Department of the Embassy, with which it works in close liaison.
128. The few weeks remaining of the period under review were spent in setting up the office, making contact with American official and unofficial bodies and other Embassies, and arranging for the coordina- tion of work, whenever appropriate, with the New York office of the Hong Kong Trade Development Council.
V. CERTIFICATION OF ORIGIN BRANCH
GENERAL
129. The Certification Branch issued 411,228 Standard, Common- wealth Preference and Comprehensive Certificates of Origin, a decrease of 1.5% on the previous year. The declared value of goods certified was $3,502 million representing 59.1% of the total value of Hong Kong products shipped during the year. The total, when compared with $3,166 million for the previous year, represented an increase of 10.6%.
130. The number of separate manufacturing establishments regis- tered with the department for the issue of certificates on 31st March, 1967 was 6,119 a net increase of 416 over 1965-66. Of the 1,315 new factories registered during the year, approximately 5% were textile mills while factories producing garments and plasticware accounted for about 40% and 30% respectively.
131. Table 3 records the issues of certificates and the declared value of the goods certified together with corresponding figures for the two previous years.
STANDARD CERTIFICATES OF ORIGIN
132. Standard Certificates of Origin issued during the year totalled 139,705, an increase of 6.1% over the preceding year's total. The declared value of goods certified showed an increase of 18.9% compared with last year's figure.
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133. The issue of Certificates of Origin for all types of hand- embroidered handkerchiefs and naperies was discontinued when it was made clear by detailed investigations that there was no viable hand-embroidery industry in Hong Kong which could produce these items in appreciable quantities at competitive prices.
COMMONWEALTH PREFERENCE CERTIFICATES
134. The number of Commonwealth Preference Certificates of all types issued during the year was 107,574 an increase of 1.6% on the total for the preceding year. The declared value of goods covered by these certificates increased by 2.7% over the preceding year.
135. Uniformity of practice was maintained 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, preparation and layout of certificates, a number of circulars dealing with individual territorial requirements were also sent to accountants.
136. A number of changes in preference documentation were rec- ommended to H.M. Customs and Excise, London to improve standard- ization and provide greater efficiency in the certification of exports to Britain. Agreement was reached on most of the recommendations.
137. A revision of the Commonwealth Preference Chart which shows the Commonwealth content percentage requirements of Common- wealth territories granting preference to Hong Kong manufactured goods, was under preparation.
COMPREHENSIVE CERTIFICATES OF ORIGIN
138. The total number of Commercial Comprehensive Certificates issued was 40,452 representing an increase of 5.6%. The value of goods exported under these certificates showed an increase of 7.6% over 1965-66 although the number of Gift Plan and Mail Order Certificates fell by 28% and 25% respectively.
139. In order to achieve more effective legal control all registered tourist shops were required to re-register under a revised registration procedure in the form of a legal undertaking given by a principal official of each registered shop.
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140. Agreement was reached with the United States Foreign Assets Control that Tourist and Gift Plan Certificates would not be required to cover exports to U.S.A. of retail purchases by tourists from registered retail outlets operated by accredited welfare and religious organizations.
141. In order to improve control over exports of cotton goods to the United States, agreement was reached with the American authorities that Commercial Comprehensive Certificates of Origin would be endorsed with the appropriate category numbers of the goods exported.
142. An amended application form C & I 160A was introduced for Commercial, Commercial Sample and Mail Order Certificates which required applicants to declare the F.O.B. instead of C.I.F. values of goods to be exported.
143. The number of factories registered under the registration procedure for wigs and other human and animal hair products increased rapidly from only one (1) at the beginning of the year to one hundred and three (103) by the end of March 1967. The declared value of wig exports amounted to $97.6 million and the total weight of raw hair from approved sourcés imported for comprehensive certification purposes was 873,670 lbs.
144. In order to provide for a more effective control over the use and documentation of raw hair for the manufacture and export of hair products to the U.S.A., all importers of raw hair from approved sources were registered under a local sale registration scheme and manufacturers of raw hair were required to purchase raw hair directly from registered importers or from overseas suppliers. All exports of hair products were required to be routed through the department's Kowloon Inspection Control for examination. Moreover, subsequent to detailed investiga- tions and discussions with representatives of the wig industry, a net weight reduction was applied to all purchases of raw hair made by registered manufacturers to take into account the weight loss incurred in the manufacture of hair products. A reduction rate of 25% on single drawn hair and 15% on double drawn hair was established and all purchases of raw hair by manufacturers were accordingly reduced.
145. Agreement was reached with the United States Government to adopt a simplified and standardized set of procedures to improve the overall effectiveness of the comprehensive certification system and three C.C.O. registration procedures were revised. These were for (a) cotton
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and linen articles and non-embroidered Chinese-type garments of non- presumptive materials, (b) tea, and (c) Chinese-type gold and silver products. Other C.C.O. procedures were in the course of revision.
CERTIFICATES OF PROCESSING
146. 1,462 Certificates of Processing for goods not qualified under origin criteria rules to receive Standard Certificates of Origin were issued. The products certified included items processed or assembled in Hong Kong such as watches and transistor radios.
MISCELLANEOUS CERTIFICATES
147. The Certification Branch also has to arrange for the verification of 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 practi- tioners on Phytopathological Certificates for hide and hair. During the year under review the branch issued 1,454 miscellaneous certificates.
CHANGES IN CERTIFICATION REQUIREMENTS OF VARIOUS TERRITORIES
148. Notification was received from the French Trade Commissioner that the list of Hong Kong goods for which 50% Commonwealth content endorsed Certificates of Origin were required for entry into France had been reduced substantially.
149. The Italian Trade Commissioner passed on a decision of the Italian Government that all commercial exports of Hong Kong goods to Italy must be supported by a Certificate of Origin issued by the department or by one of the approved non-government issuing authori- ties. In the case of certain textile products including table linen and bed linen the Italian authorities would accept only certificates issued by the Department of Commerce and Industry.
150. The Syrian Government announced that Certificates of Origin and invoices covering imports into Syria must contain the name of the factory or the company which manufactured the goods. Subsequently a notification was issued that the names of manufacturers could be given by the exporting companies on separate declarations which need not be legalized by Chambers of Commerce or other bodies. The department had asked to Hong Kong Government Office in London to take this matter up with the U.K. Board of Trade.
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151. At the request of the Government of the Federal Republic of Germany, it was agreed that with effect from 1st January, 1967 all exports of Hong Kong origin textile products to West Germany must be supported by Standard Certificates of Origin issued by the department.
152. The Director-General, Ministry of Commerce and Industry, Nicosia advised that imports into Cyprus under Open General Licence of goods claiming Hong Kong origin must be supported by a Certificate of Origin issued by the department. The Director, Customs and Excise, Famagusta stated that for claims for Commonwealth Preference, Standard Certificates of Origin issued only by the department, would continue to be acceptable but, with effect from 1st June, 1967, the percentage of Hong Kong labour costs should be shown. This new requirement was under consideration.
-
153. The Comptroller of Customs and Excise, Sarawak advised that Commonwealth Preference Certificates in support of claims to Preference for Hong Kong manufactured goods imported into Sarawak must be accompanied by Forms G120A endorsed by the department.
154. The Customs authorities of Grenada and Barbados, West Indies advised that wearing apparel containing a small quantity of rubber, for example, in the elastic waist of boys' shirts, was not considered to be wholly or partly manufactured from rubber, and that 25% Common- wealth Preference Certificates only would be required for admission of such goods at preferential rates of duty. 50% content certificates had previously been required.
155. The Comptroller of Customs, Malaysia advised that Common- wealth Preference had been withdrawn from certain categories of Hong Kong exports to Malaysia including textiles, textile make-up goods, perfumery cosmetics, radio receiving sets, bicycles and musical instruments.
CERTIFICATION CO-ORDINATION COMMITTEE
156. Further efforts were made to persuade overseas Customs authorities to accept 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 to issue Certificates of Origin under the International Convention relating to the Simplification of Customs Formalities, 1923.
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157. The Certification Co-ordination Committee which comprises members of all the designated organizations and is chaired by the Assistant Director, Industry Division met on several occasions to ensure a uniform approach to origin criteria, certification procedures, and negotiations with overseas authorities on origin matters generally. The Committee also considered proposals made by the department during the year under review for improved coordination and control between the member organizations in Hong Kong's certification system.
158. The Committee welcomed the attendance as an observer at the meetings of a senior representative of the Chinese Manufacturers' Association in view of the Association's application to the Government to be designated as competent to issue Certificates of Origin under the International Convention for the Simplification of Customs Formalities 1923. The department agreed to assist the Association to establish a certification of origin system which would meet local and international requirements and to train administrative and inspectional staff for the Association.
REVENUE
159. Fees for Certificates of Origin, collected by means of postage stamps are $10 for Standard Certificates of Origin and Commonwealth Preference Certificates, $35 for Commercial Comprehensive Certificates and $5 for all other certificates. Revenue from certificates amounted to $4,525,480 which was 1.6% more than for the previous year.
VI. INDUSTRY INSPECTION BRANCH
GENERAL
160. The Industry Inspection Branch is responsible for the physical policing of the complicated administration controls devised to safeguard the integrity of the system under which the department issues various types of Certificates of Origin. It is headed by a Senior Industry Officer directly responsible to the Assistant Director in charge of the Industry Division. By June, 1966, the Branch was entirely staffed by the new grades of Industry Officer, Senior Industry Assistant, Industry Assistant Class I and Industry Assistant Class II. Some 35 Industry Assistants Class II commenced field duties in August of 1966 upon completion of their induction training, followed by 10 Industry Assistants Class I in October of the same year. These staff increases led to a quickening in
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the tempo of all the Branch activities in inspection, investigation and prosecution, particularly in the latter two. At the end of the year under review, the Branch had a strength of 70 officers (including 9 attached to the Textiles Division and the Certification Branch) against an establish- ment of 83.
INSPECTIONS
161. A total of 9,564 factories and consignment inspections (excluding those conducted at the Kowloon Inspection Control) were carried out during the year, compared with 9,258 in 1965-66. That no marked increase was registered may be ascribed to the deployment of more staff to cope with increasing investigation work. The Branch was also respon- sible for implementing the scheme designed to ensure compliance by Hong Kong manufacturers of paint-coated toys with international health standards. In this regard, 178 samples of surface paints in use were collected and submitted for tests or analyses. Toy manufacturers whose paints had been found to contain excessive lead were advised to destroy the stocks of toys concerned under the supervision of Branch officers.
162. A breakdown of inspections figures for 1966-67 is as follows:
(i) Initial registration for certification purposes
(ii) Routine re-inspection
(iii) Preference undertakings
3,562
3,337
269
咖啡
1,324
1,072
9,564
(iv) Comprehensive Certificates or Origin procedures
(v) Consignment spot checks
KOWLOON INSPECTION CONTROL
163. In addition to the field inspections reported in the preceding paragraph, the Kowloon Inspection Control undertook physical examina- tions of certain categories of consignments prior to shipment as indicated below:
(i) Selected items under Comprehensive
Certificates of Origin
(ii) Cotton garments and made-up goods
exported to the United Kingdom under the High Cost Content Scheme...
(iii) Antiques to the United Kingdom (iv) Embroidered handkerchief and naperies
under Standard Certificates of Origin/ Commonwealth Preference Certificates...
Total
1966-67 1965-66 1964-65
18,575
16,526
16,999
3,026
2,525
3,377
51
77
36
6
Nil
18
21,658
19,128
20,430
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With the implementation of the comprehensive certification procedure for hair products on 1st June, 1966, imports of raw hair and subsequent exports of finished products to the United States were required to be examined at the Control office. The industry grew at such a pace that examination of these items represented more than 50 per cent of the workload of the Control. The total value of exports of hair products sent to the Control for examination was in the region of $100 million in the period June, 1966 to March, 1967.
INVESTIGATIONS
164. 377 investigations were initiated and 372 concluded, the latter representing a 30 per cent increase over the previous year. As a result, 103 factories were warned for technical infringements of departmental procedures or undertakings, 19 factories were suspended from certifica- tion service for periods varying from 1 to 3 months, and 12 factories and tourist shops were removed from the certification register due to malpractice. (Cases which led to prosecutions are reported separately).
165. The four main groups of factories or export firms subjected to administrative or legal action were:
(a) Cotton garment factories which subcontracted the manufacture of goods to unauthorized firms or breached preference under- takings to the department or H. M. Customs, London;
(b) Firms which were found engaged in exports of foreign origin hand-embroidered naperies under the guise of Hong Kong products to Italy;
(c) Firms which substituted foreign steel bars for Hong Kong
products; and
(d) Wig factories which used unauthorized hair for export to the
United States.
166. Close liaison was maintained with oversea Customs authorities, in particular those for United Kingdom and other Commonwealth territories and a number of investigations were conducted at their request.
PROSECUTIONS
167. The Prosecution Section dealt with a record number of cases and a total of 278 actions were taken against 158 factories and firms for offences which included false declarations on applications for Certificate
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of Origin or related documents, contraventions of undertakings to the department and offences against the Merchandise Marks Ordinance. Severe penalties were imposed in many cases, particularly those where foreign products were substituted for Hong Kong manufactures. Total fines amounted to $661,730, and ten defendants were imprisoned for one to twelve months. These are the highest totals of fines and imprisonment ever awarded for such offences. Below is a summary of prosecutions undertaken in comparison with the previous years:
(i) Total no. of actions
(ii) Persons arrested
(iii) Persons or companies summonsed (iv) Total fines ...
(v) Total number of persons sentenced to
terms of imprisonment
1966-67
1965-66 1964-65
278
221
28
102
56
3
56
68
12
...
$661,730
$195,900 $ 17,865
10
Nil
Nil
ANTI-CORRUPTION MEASURES
168. Despite intensive efforts to persuade the public to stop making illegal offers of gifts on money to officers of the Branch, the practice continues. No less than 115 reports of improper approaches were received from inspection and investigation officers and in four instances, the guilty factory officials after prosecution were sentenced to imprisonment. A Branch Committee, with membership drawn from all grades of the staff, was formed to review the problems involved in combatting corruption.
VII. INDUSTRIAL DEVELOPMENT BRANCH
REVIEW OF INDUSTRY
Textile Spinning.
169. At the end of the period under review, there were 32 (33)* cotton spinning factories registered with the department for certification purposes, employing over 19,470 (21,100) workers and operating 729,827 (724,722) spindles, an increase of 5,105 spindles over the total at the end of the previous year. Production of cotton yarn was approximately 294.57 (289) million lbs. ranging mainly from 10s. to 60s. counts, carded and combed in single or multiple threads.
* Last years figures shown in brackets.
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170. The production of cotton/synthetic fibre became increasingly important. At the end of March 1967, nine cotton mills had adapted a percentage of their spindles to the spinning of polyester/cotton and polyester/viscose yarn for weaving into shirting and other fabrics for which there was a growing demand. Total production was approximately 14.48 (2) million lbs.
171. Production of woollen and worsted yarn declined slightly to 16.45 (17.4) million lbs. Most of this yarn was utilized by the knitting sector, a small quantity being woven into cloth.
172. Production in the cotton weaving sector increased slightly during the year. Expansion in capacity continued but on a diminishing scale. At the end of March 1967, there were 172 (179) cotton weaving factories registered with the department for Certificates of Origin, with a total of 22,017 (21,198) looms installed.
173. Total production of cotton piecegoods was approximately 685.31 (650) million square yards and consisted chiefly of cotton grey drill, shirtings poplin, gingham, canvas and other bleached and dyed cloth and prints.
Textile Finishing
174. The dyeing, printing and finishing industry concentrated on such developments as multi-colour screen and roller printing, pre- shrinking processes, polymerizing for the production of drip-dry fabrics and finishing of synthetic materials.
Cotton Knitting
175. The position of the cotton knitting industry remained almost static. According to records complied by the Labour Department, at the end of March 1967, there were 250 (252) cotton knitting mills employing 10,323 (9,394) workers. Products were mainly shirts, gloves, and under- garments. Cotton interlock materials, and warp-knitted cotton fabrics were also produced.
Woollen Knitting
176. The woollen knitwear industry continued to grow. At the end of March 1967, there were 341 (231) factories in operation employing some 22,766 (17,800) workers. Exports of woollen knitwear of all types, including gloves, were valued at $549 million, an increase of 8.1% over the previous year.
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Wearing Apparel
177. Hong Kong manufactures a wide range and variety of garments including shirts, underwear, outer-wear (both knitted and woven), gloves, hats and caps, socks and stockings. By the end of March 1967, the industry employed a labour force of 77,927 (65,150) workers in 1,480 (1,223) industrial undertakings. The value of exports in 1966-67 reached $2,083 ($1,796) million, an increase of 16% over the value for the previous year.
178. The production of permanent-press garments was successfully introduced. This new finishing process is most successfully applied to mixed cotton/synthetic fabrics and consequently could have far reaching effects in accelerating the swing towards the use of synthetic fabrics.
Plastics
179. The plasticware industry is the second largest industry in Hong Kong in terms of employment, production and export earnings. At the end of March 1967, there were 51,323 (45,280) workers employed in some 1,468 (1,300) factories. The value of exports of plastic products reached $696 (606) million.
180. Exports of plastic flowers, fruit and foliage, which suffered a slight set-back for the first time last year, increased slightly and were valued at $268 ($246) million in 1966-67.
Light Metal Products
181. By March 1967, there were 1,460 (1,190) factories registered with the Labour Department, manufacturing light metal products with a total labour force of 34,505 (32,180). Enamelware and metal torches continued to be the largest sectors of this industry.
182. The enamelware industry remained stagnant as more develop- ing countries undertook their own manufacture, sometimes with assist- ance from Hong Kong. Exports of enamelware in 1966-67 were valued at $38.6 ($38.4) million.
183. Hand-torches and lanterns continued to be one of the major lines. At the end of March 1967, there were 46 (46) factories employing some 4,629 (4,770) workers. Exports amounted to $74.3 (72.6) million.
184. There was no significant development in the stainless steel cutlery industry.At the end of the period under review, there were seven factories employing 1,344 (1,420) workers. Value of exports in 1966-67 was $15.53 ($14.57) million.
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Electronics
185. The electronics industry continued to be the fastest growing industry in Hong Kong, particularly in the components and sub- assembly sectors. In March 1967, there were four factories producing silicon transistors, six factories engaged in the production of computer components and thirteen factories producting radio components and sub-assemblies. Exports of transistors in 1966-67 were valued at $119 ($70) million while exports of T.V. tuners amounted to $60 ($29) million.
186. The manufacture of transistor radios continued to grow. During the year, exports of radios amounted to $212 ($130) million. There were 43 (39) factories in the radio industry at the end of March 1967.
Hair Wigs
187. The hair wigs industry, exporting mainly to the United States, came virtually to a standstill when the United States authorities placed a ban on imports at the end of 1965. The ban was lifted in early 1966 when a new Comprehensive Certificate of Origin registration procedure was agreed with the Foreign Assets Control of the U.S. Treasury. The industry employed about 15,000 workers and exports in 1966-67 rose to $92 ($70) million.
Machinery
188. The manufacture of machinery mainly for sale to local factories and workshops, continued to expand. Machines produced included textile machinery, diesel engines, diesel operated generators and pumps, plastic moulding machines, power presses, lathes, planning machines and platen presses. This industry also recorded useful exports during the
year.
Shipbuilding
189. Activity in the shipbuilding and repair industry continued satisfactorily with an increasing proportion of orders for repair and maintenance work. In March 1967, the industry employed 10,917 (11,400) workers.
190. Exports of yachts, pleasure cruisers and other small crafts for the period under review declined and were valued at $16.1 ($20.98) million.
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Shipbreaking and steel rolling mills
191. Activity in the shipbreaking industry continued to decline. The number of ships broken up during the year under review dropped to 28 (35) vessels totalling 232,584 (275,000) gross tons. In the steel rolling sector, statistics published by the Labour Department at the end of March 1967 showed there were 17 (22) mills employing 1,279 (1,447) workers. The industry relied heavily on domestic sales and, as a result of severe competition from imported bars and rods, most mills were operating well below capacity.
192. A total of 2.4 million square feet of land in Junk Bay has been sold to 24 shipbreakers and steel-rollers, 1.7 million square feet being on the western shore and 0.7 million square feet on the eastern shore. Some delay has occurred in the development of these sites but the reclamation work and sea wall construction made reasonably good progress. Two companies are already in operation and most of the sites are expected to be in productive use shortly.
LAND FOR INDUSTRY
193. The Branch maintains up-to-date information on the major industrial development areas, in order both to assist Government in formulating and executing its policy regarding industrial land and to provide information and assistance regarding the availability of indus- trial sites to potential investors.
Kwun Tong
194. Major development at Kwun Tong was completed. In March 1967, 478 (352) factories were in operation there, and construction work was completed or in progress on a further 38 (35) sites.
Tsuen Wan Kwai Chung Tsing Yi
195. The Kwai Chung development scheme, which is the largest so far, went ahead satisfactorily. This scheme, together with development in Tsuen Wan and on Tsing Yi island, is designed to provide a self- contained industrial township with an ultimate population of 1.2 million. The older part of the reclamation area is already intensively developed and more industrial sites in the reclaimed area of Kwai Chung valley became available during the year.
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Industrial Land Sales
196. Sales of industrial land remained low; only 5 (2) sites in Kwun Tong and a further 4 (6) sites in other parts of the urban area were sold. Unit land prices ranged from $29.51 to $51.21 per square foot. In the New Territories, a total of 17 (15) sites were sold by auction or granted by private treaty.
INDUSTRIAL CO-OPERATION
197. In common with most other developing countries, Hong Kong is anxious to attract capital and expertise from abroad to join in various forms of industrial enterprise with local industrialists or commercial entrepreneurs. The Industrial Development Branch is responsible for activities in this sphere, and maintains liaison with trade and industrial associations, banks, foreign consulates and missions and other Govern- ment departments. Discussions were held with 28 (52) overseas visitors in connection with potential joint ventures. A number of visits to factories and industrial sites were organized. In addition, the Branch helped a number of visitors who sought introductions to possible suppliers of goods in which they were interested.
HEALTH AND SAFETY STANDARDS
General
198. The Industrial Development Branch continued to investigate overseas complaints concerning alleged health and safety hazards in Hong Kong products. Most of these complaints arose in Britain where there has been increasing concern from consumer protection agencies over all aspects of health and safety in consumer goods and particularly in toys. The British Home Office initiated a series of discussions in Britain to consider health and safety standards for toys and it appeared likely that several new standards would be given legal or institutional validity. Since the Hong Kong toy trade with Britain is significant, the Hong Kong Government has maintained close liaison with the Home Office. The Branch also worked closely with the London Office and with officers of the Labour Department, the Urban Services Department and the Medical and Health Department in Hong Kong.
199. A number of circular letters on health and safety were sent to registered toy manufacturers to assist the industry to understand the nature of the problem and to help industrialists to overcome problems in regard to specific products.
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Drink Coolers
200. Export of drink coolers was stopped last year after the Medical and Health Department had confirmed that the water in many drink coolers was contaminated. In order to provide an acceptable basis for future production, the Medical and Health Department, the Urban Services Department and the Labour Department in conjunction with the Commerce and Industry Department established a Code of Practice to be used in factories producing drink coolers. Copies of this Code were circulated to manufacturers. However, by the end of the year, none of these manufacturers was yet in a position to resume production.
Liquid-Filled Toys
201. As a result of complaints from the United Kingdom that the fluid contents hermetically sealed inside toy feeding bottles exported from Hong Kong represented a possible risk to health, tests were initiated by the Branch and carried out by the Medical and Health Department. The bacteriological analysis carried out by the Government Pathologist showed that the level of bacteriological contamination in the liquid was undesirably high although the associated health risk did not appear to be great. All factories known to be making this item agreed to a voluntary suspension of production and exports until such time as the health problem was clarified.
202. The Urban Services Department, the Medical and Health Department and the Labour Department in conjunction with the Com- merce and Industry Department undertook a revision of the Code of Practice previously formulated for drink coolers to enable it to be applied to liquid filled toys. The Code was finalized towards the end of the year.
203. The Urban Services Department agreed in principle to issue health certificates for liquid filled toys and a system for control of factory operation, registration of approved factories, inspection and sampling of products was arranged. However by the end of the year production of liquid filled toys had not restarted.
Toys-Lead Content
204. No further complaints of excessive lead content in toys were received. The department's random sampling and testing system was maintained; 217 samples taken from toy factories were submitted to
46
the Government Chemist for analysis. 35 samples were found to have a lead content in excess of 11,000 p.p.m. and measures taken to prevent the sale of such toys. The testing service has thus encouraged individual manufacturers to exercise care in the selection of paints.
205. In February 1967, the Federation of Hong Kong Industries began to operate a testing and certification service for lead in paint and plastic materials. Appropriate publicity for this service was arranged.
Toys-Faulty Designs
206. The Branch investigated a number of overseas complaints about danger arising from faulty design features in Hong Kong toys. When- ever justified, the Branch recommended modifications to Hong Kong manufacturers concerned and in all cases these were incorporated voluntarily.
Electrical Products
207. Several Hong Kong manufactured electrical products were the subject of complaints by the British Home Office because they fell short of required safety standards. The most serious complaint concerned a Hong Kong made electrical soldering iron which was examined and found to be unsafe. Details were obtained through the London Office of the testing facilities available in the United Kingdom, and a circular issued to the trade about these facilities.
ECONOMIC COMMISSION FOR ASIA AND THE FAR EAST
208. The Industrial Development Branch was responsible for briefing the Hong Kong delegation to the First and Second Sessions of the Asian Industrial Development Council held in Bangkok from 2nd-7th Septem- ber, 1966 and 28th February - 6th March, 1967 respectively. Both meetings were attended by a three-member delegation which was jointly led by Mr. James M. H. Wu, a member of the Trade and Industry Advisory Board and Mr. D. C. C. LUDDINGTON, Deputy Director.
209. The Branch briefed another three-member delegation which attended the 19th Session of the E.C.A.F.E. Committee on Industry and Natural Resources held in Bangkok from 7th March - 14th March, 1967. The joint leaders of this delegation were again Mr. James M. H. Wu and Mr. D. C. C. LUDDINGTON.
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Asian Productivity Organization
210. Hong Kong was represented at two Asian Productivity Organ- ization meetings during the year. A three-member delegation led by Dr. S. Y. CHUNG (then A.P.O. Alternate Director for Hong Kong) represented Hong Kong at the 7th Governing Body Meeting held in Tokyo from 18th to 20th April, 1966 and a two-member delegation led by Mrs. S. YUEN represented Hong Kong at the 7th Workshop Meeting in Tokyo from 17th to 20th January, 1967. At the former meeting it was decided, inter alia, to formulate a 5-year programme for the A.P.O., and at the latter a number of proposals affecting Hong Kong were discussed. These included the holding of the 8th Workshop Meeting in Hong Kong in 1968 and the mounting of an Itinerant Seminar on Manpower Development in a Growing Enterprise and possibly also a Symposium on Top Management.
211. Two seminars, one on Product Development, Design and Pack- ing and the other on International Marketing, were implemented by the Hong Kong Management Association under the joint auspices of the Asian Productivity Organization and the Hong Kong Government. Both were international seminars, with eighteen local participants and four from A.P.O. member countries in the former and fifteen local and nine overseas participants in the latter.
212. Hong Kong also participated in ten A.P.O. overseas projects, including industrial study missions to Japan on plastics, ship-building and ship-repairing, the provision of leaders for two seminars, participa- tion in two 3-month Travel Industry Management Training Programmes in Honolulu and participation in a 10-week Preventive Maintenance Training Course and a 5-week Export Marketing for Small Industries Training Course. A 7-member Productivity Study Team on Labour Relations and a 33-member Southeast Asian Industries Study Team from the Japan Productivity Centre visited Hong Kong in February, 1967.
IMMIGRATION ENQUIRIES
213. The Industrial Development Branch assisted the Immigration Department by interviewing applicants who wished to enter Hong Kong to establish a business or to take up employment in commerce and industry.
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TRADE COMPLAINTS
214. The number of commercial disputes in which the department was asked to mediate rose sharply. A total of 1,027 (744) complaints were received from overseas firms or individuals. A detailed breakdown is given in Table 4. The majority of the complaints were amicably settled after intervention by the department. Forty-five local firms or individuals sought assistance in obtaining settlement of disputes with overseas firms.
VIII. TRADE LICENSING AND SUPPLIES BRANCH
TRADE LICENSING
215. In May, 1966, the Importation (Southern Rhodesian Tobacco) Regulations, 1965 were repealed and replaced by the Importation and Exportation (Southern Rhodesia) Regulations 1966, thereby subjecting all imports from and exports to Southern Rhodesia to licensing control. This measure was introduced in conformity with the policy of the United Kingdom Government in respect of sanctions against Southern Rhodesia.
216. In response to a resolution adopted by the International Coffee Council in September, 1966, all imports of coffee from countries which are not members of the International Coffee Agreement were made subject to import quota control. The quota for the period from 1st January, 1967 to 30th September, 1967 was set at 1.7 million lbs.
217. In line with the policy of the United Kingdom Government, controls on exports of para-military goods to Indonesia were relaxed in August, 1966. Other strategic exports to Indonesia however continued to be subject to control.
218. The number of import licences issued for all purposes, including the control of strategic goods and reserved commodities, and in respect of foreign exchange and health regulations, totalled 28,097 (23,117).
219. 254 (122) delivery verification certificates were issued to confirm the arrival in Hong Kong of strategic goods. Increased imports of electronic products classified as strategic accounted for the substantial increase in the number of certificates issued. 70% of the applications for delivery vertifications were to cover these items.
220. The majority of export licences issued by the Trade Licensing Branch are for the purpose of exchange control. Total licences issued (excluding textile licences processed in the Textile Branch) numbered 433,733 (378,335).
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221. Export licences covering strategic items require the production of a delivery verification or landing certificate issued by the appropriate authority in the country of import. 1,353 (1,137) of these certificates were supplied by exporters during the year.
SUPPLIES SECTION
222. Certain essential food and fuel supplies are subject to licensing control. During the year the department disposed of the last remaining Government stocks of food-stuff which had been held in godowns. A watch will continue to be maintained on commercial stocks to ensure that these are adequate to cover anticipated shortages.
Rice
223. The Rice Control Scheme continued to be administered under the Importation and Exportation (Reserved Commodities) Regulations, 1954. The basic quarterly import quota remained at 88,000 metric tons with 44,000 metric tons as the minimum reserve level.
224. The working of the Rice Control Scheme was put to a severe test during the quarter following November, 1966. By the middle of the summer it appeared likely that there would be a shortage of rice in Asia. Rice stocks were therefore built up by the issue of supple- mentary quotas. On 3rd November, 1966, in order to try and bring down the rising price of rice in its own domestic market, Thailand banned the export of rice. As Thailand is the major supplier of rice to South East Asia and has been Hong Kong's principal source of supply for nearly twenty years, this sudden decision came as a shock, even though the ban was originally intended to last only two weeks. An announce- ment by the Commerce and Industry department that there were adequate stocks in Hong Kong contained an immediate rise in prices. However when the export ban was later extended for an indefinite period and when at the same time unrest in Macao disturbed public confidence and increased demand, prices started to rise substantially. Between the end of October and the end of December, importers' selling price at auction increased by approximately $15 a picul for Thai 100% whole 3rd grade rice, by $20 a picul for Chinese whole rice, and $6 a picul for Thai broken Al super grade rice.
225. Representations were made to the Thai Government through the British Embassy in Bangkok and a special visit was made by the Deputy Director, Administration and Industry, and an officer of the
50
Branch, to Bangkok to discuss the situation with senior Thai officials from 6th to 8th December. In mid-December, the Thai export ban was partially lifted when shipments of broken rice to traditional markets, including Hong Kong, were resumed on a small scale. This was followed by the export of a limited quantity of whole rice to Hong Kong alone later in December. Rice export from Thailand had returned to normal by the end of January, 1967 when the Thai Government permitted commercial exports based on a quota system. Stocks in Hong Kong were quickly built up and by the end of March, were over 98,000 tons.
226. On 1st February, I tabled a paper dealing with the background to the Hong Kong rice trade in the Legislative Council. The paper explained the legal and historical aspects of the rice control scheme, described the organization of the various sectors of the rice trade and analysed the trend in consumption, sources of supply and price of rice. In my statement introducing this paper, I said that the rice control scheme was designed to ensure regular supplies to the local consumer with a reserve stock to meet emergencies and it had withstood satis- factorily the very severe test imposed on it during the last three months of 1966. I told the Council that rice has been sold to the Hong Kong consumer at a reasonable price and that the introduction of complicated apparatus of price control was not justified. However, I proposed to watch the trend of rice prices closely and would be ready to use the considerable powers conferred on me by the Reserved Commodities Regulations to ensure that rice prices did not rise unduly when supply and demand were reasonably balanced.
227. Total rice imports during the year were 367,618 (358,884) as follows:
1966-1967
Source
Thailand
China ... Cambodia
N. Vietnam
Australia
Burma
Singapore
Egypt
U.S.A.
Macau
Pakistan
...
...
1965-1966
M/Tons %
M/Tons %
218,250 60.8
235,308
64.0
...
87,045
24.3
103,085
28.0
...
49,694
13.9
13,093
3.6
·
2,574
0.7
3,845
1.1
500
0.1
5,710
1.6
299
3,101
0.8
2,100
0.6
866
0.2
500
0.1
10
522
0.1
358,884
100.0
367,618
100.0
51Offtakes from stocks were as follows:
1965-1966
1966-1967
Type
M/Tons
%
M/Tons %
Whole Rice—
Thai origin
113,912
32.1
108,614 31.0
Chinese origin
85,492
24.1
97,979
27.9
Other origin
50,673
14.3
25,799
7.4
250,077
70.5
232,392
66.3
Broken Rice-
Thai origin
...
...
79,021
22.3
98,209
28.0
Low Grade and Other rice
for Industrial use/poultry
feed-
Thai origin
Cambodia origin
Other origin
6,084
1.7
2,959
0.8
8,776
2.5
3,151
08
0.9
615
0.2
4,553
1.3
...
...
15,475
4.4
10,663
3.0
Glutinous rice-
Thai origin
8,489
2.4
8,023
2.3
Chinese origin
510
0.2
608
0.2
Other origin
855
0.2
811
0.2
9,854
2.8
9,442
2.7
Total offtakes
354,427
100.0
350,706 100.0
Frozen Meat
228. Import of frozen meat, under licence but not otherwise con- trolled, amounted to 33,034 (24,154) long tons in 1966-67. 86.4% of imports came from China.
229. Consumption of frozen and fresh meat during the past three years has been as follows:
Fresh meat Frozen meat
52
1964-65
1965-66
1966-67
L/Tons
L/Tons
L/Tons
101,757
106,948
106,960
19,945
24,046
32,245
121,702
130,994
139,205
Coal
230. Total imports for 1966-67 amounted to 144,128 (158,316) long tons. China remained the main supplier of coal and had 81.8 of the total market.
Firewood
231. Imports of firewood amounted to 7,861 (16,191) long tons.
Accounts
232. The remaining stocks of 4,614 tins of corned beef were for- warded to the by-product plant of the Urban Services Department for destruction. The net loss for the year was $4,972.13.
IX. DUTIABLE COMMODITIES BRANCH
REVENUE FROM EXCISE DUTIES
233. The total net revenue from duties and licence fees during the financial year 1966-67 was $318,658,560, an increase of 21.1% over the previous financial year's $263,132,130.
234. Net revenue from duties in the year under review as compared with previous years are summarized to the nearest thousand dollars in the table below:
$'000
1964-65
1965-66
1966-67
Tobacco
101,184
93,684
118,236
Hydrocarbon Oils
75,816
82,391
103,713
Liquor
71,843
77,019
85,261
Table Waters
6,328
6,244
7,296
Methyl Alcohol
54
40
55
255,225
259,378
314,561
A full breakdown of gross collections, together with refunds and draw- back payments is recorded in Table 5.
Tobacco
235. Net duty collected from tobacco, the principal source of excise revenue, amounted to $118,235,613 an increase of 26.2% but still fell short of the estimate by $8.8 million. The contributory factors for the above were:
53
(a) Duty rates for all types of tobacco, with the exception of Chinese
prepared tobacco, were increased by $2.00 per pound on 24th February, 1966. Net revenue from this category increased by $24.6 million.
(b) The increase of duty rates led to some curtailment in consump- tion and it took some time before the pattern reverted to normal. (c) The decline of exports of locally manufactured cigarettes to Sabah caused tobacco factories to hold smaller duty paid stocks. This resulted in some reduction of releases of tobacco leaves from bond.
(d) There was a complete absence of any speculative withdrawals from bond, in the period just before the Budget Day. This may be attributed to the fact that it was realized that any attempts at speculative withdrawals would have forced Government to introduce protective measures as it did in the previous year.
Collection of $1.04 million from Chinese prepared tobacco registered a 7% decrease over the 1965-66' collection of $1.12 million.
Hydrocarbon Oils
236. Net revenue from hydrocarbon oils amounted to $103,712,960 an increase of 25.9% over 1965-66.
237. Revenue from light diesel oil used by road vehicles other than public omnibus rose by 31.2%. Duty rates for motor spirit and for diesel oil for the road vehicles, other than public omnibuses owned and operated by the China Motor Bus Co. Ltd. and by the Kowloon Motor Bus Co. Ltd., were increased by 30 cents per gallon on 24th February, 1966.
Liquor
238. Net revenue from intoxicating liquors totalled $83,393,688 an increase of 11.0%. All types of liquor, with the exception of locally manufactured Chinese-type spirits, yielded increased revenue. Collec- tions from imported Chinese-type spirits increased by $2,329,921 or 18.1%, contrasted with a drop by $1,112,791 or 7.7% for the locally manufactured counterpart. Brandy, beer and whisky also showed increases of $3,416,776 or 17.7%, $2,832,630 or 18.5% and 888,421 or 10.7% respectively.
54
239. The demand for imported high-strength potable alcohol from South Africa for dilution as Non-European-type spirits fell slightly. Net revenue from spirituous liquor other than intoxicating liquor declined by only $3,966 or 0.2%.
Table Waters
240. As a result of fairly large importation of table waters from mainland China coupled with their attractive prices, consumption of aerated soft drinks increased by $1,051,809 or 16.8% compared with $6,244,839 for 1965-66.
REVENUE FROM LICENCES
241. Details of types of licences and revenue collected therefrom are recorded in Table 6. Revenue from licences increased by 9.2% compared with 4.4% in the previous year.
242. Net revenue from licences, as compared with previous years is summarized below by commodity rather than by type of licence:
Liquor Tobacco
...
...
...
Hydrocarbon Oils
Table Waters
Ship & Harbour Vessel
Methyl Alcohol
1964-65
2,582
1965-66
$'000 1966-67
2,745
3,012
786
784
862
...
196
195
193
27
25
25
5
4
4
...
1
1
1
3,597
3,754
4,097
X
PREVENTIVE SERVICE
GENERAL
243. After three years of geographical and structural re-organization, the Service spent the year in consolidating its position as the uniformed and disciplined section of the department. Greater emphasis was placed on the Dutiable Commodities Ordinance to ensure that maximum duties were collected from the five dutiable items of tobacco, liquor, hydrocarbon oils, table waters and methyl alcohol and on the collection
55
of excise duties from local manufacturers of these items. In order to support this concentration, increased activity in the suppression of illicit distillation and the mis-use of industrial fuel oil was undertaken. This is reflected in the figures in Table 7 which shows that 7,364 gallons of treated oil were seized as against 3,259 gallons the previous year.
244. The change in pattern in illicit distillation mentioned in the Review Chapter is also illustrated by the figures in Table 7 where it will be noted that the number of stills discovered dropped from 227 to 172, but the number of gallons of mash seized rose from sixty-three thousand to nearly eighty-eight thousand. The stills in all cases were of a sophisticated pattern.
Conversion of Marine Crews
245. The Preventive Service launches are, with one exception, crewed by officers provided by the Marine Department. This arrangement has certain disadvantages in that Marine Department crews are not subject to the same statutory code of discipline as Preventive Service officers, nor are they trained to undertake preventive or excise work. It was therefore decided that the Service should provide its own crews for the launches and in August 1966 approval was obtained for the creation of 110 new posts in the Marine Section to enable this to be done. A start was made on the training of serving Preventive Service officers with a flair for marine work in navigation and engineering.
246. The six cruising launches of the Service continued to operate under the control of the Police in support of anti-illegal immigration operations, and during the year were responsible for the capture of 121 illegal immigrants. When launches were required by the Service for preventive work in the narcotic or dutiable commodities field, they were returned to general duties with the section concerned.
Preventive Service Review
247. The third Preventive Service Review was held on 15th Decem- ber, 1966 at the Defence Force Parade Ground. I inspected the parade, which consisted of 246 men from all divisions of the Preventive Service. In my address I referred to developments which had taken place in the Service since the last review and laid particular stress on the revenue protection responsibilities of the Service.
56
June Rainstorm Damage
248. The Preventive Service was largely responsible for supervising an emergency supply route for the transport of food to the Peak area when ordinary roads on Hong Kong island were cut in several places by the phenomenal rainstorm on 12th June. These arrangements were made in conjunction with the Police, the major food retail firms and the Hong Kong Regiment which provided the landrovers which had to be used on the steep and narrow Pokfulam Reservoir road. A special convoy system continued for just over a week until temporary repairs to the main roads were made.
Food Unit Exercise
249. The Food Unit of the Essential Services Corps which is manned largely by the Preventive Service held its second exercise on Sunday, 25th February. The task of the Food Unit is to ensure the maintenance of food supplies to the general public, the Police Force, the Fire Service and the Auxiliary Services under emergency conditions. The purpose of this exercise was to test certain plans for operations under curfew conditions. It represented an extension of the exercise last year and a number of other Units were involved. Emergency canteens manned by the Canteens Unit supplied a hot meal to all those taking part in the exercise.
ORGANIZATION
250. It was found necessary at the beginning of the year to create an additional post in the rank of Chief Revenue Inspector for the Preventive Service Headquarters to handle the co-ordination of non operational duties and staff administration.
TRAINING
Training Advisers's Report
251. Mr. F. BISHOP, C.B.E., previously Commissioner for Customs and Excise in the East African High Commission, arrived in December 1965 to take up the post of Training Adviser to the Preventive Service. Mr. BISHOP's First Report was submitted in April 1966, and contained very comprehensive recommendations regarding the training require- ments of the Preventive Service. The main recommendation concerned the establishment and staffing of a permanent residential training school to replace the existing inadequate training facilities at Kwun
57
Tong. This recommendation received my full support, and approval in principle was sought from the Colonial Secretary while a search was made for a suitable site.
Courses
252. Induction courses were held at the Preventive Service Training School in Kwun Tong for thirty-three Revenue Sub-Inspectors, one Woman Revenue Sub-Inspector and forty-four Assistant Revenue Officers.
253. Also at the training School in Kwun Tong six Revenue Sub- Inspectors who passed promotion examinations were given a concen- trated promotion course.
254. Refresher courses were held for thirty Assistant Revenue Officers, and twenty-nine Revenue Sub-Inspector recruits received scooter driving training.
255. Departmental English classes were held for forty-three rank and file and twenty-nine of them were successful in the English Standard examinations held by the Government Examinations Unit.
256. During the year fourteen members of the inspectorate attended Extra Mural courses sponsored by the Hong Kong University.
257. Two Senior Revenue Inspectors and two Revenue Inspectors attended various courses held by the Government Training Unit during the year.
258. The Technical College conducted a course for Practical Radar Observation during the year and eleven Revenue Inspectors and eleven Revenue Sub-Inspectors were selected to attend.
259. One Revenue Inspector and two Revenue Sub-Inspectors attended a Prosecution Course held in the Police Training School.
260. Four Revenue Inspectors went to the United Kingdom during the summer of 1966 for practical attachment to H.M. Customs and Excise Department. These officers also attended an advanced course on Personnel Management at the Leicaster College of Technology.
STAFF AND DISCIPLINE
261. Two Revenue Inspectors, five Revenue Sub-Inspectors and one Assistant Revenue Officer transferred to other departments of Govern-
ment.
58
262. Two Assistant Chief Preventive Officers, two Revenue Inspec- tors, one Revenue Sub-Inspector, two Senior Revenue Officers and two Revenue Officers retired from the Service.
263. Three
Three Revenue Sub-Inspectors, twelve Assistant Revenue Officers and three Woman Assistant Revenue Officers resigned.
264. One Revenue Sub-Inspector and two Assistant Revenue Officers were dismissed, and two Revenue Sub-Inspectors had their services terminated.
265. One Revenue Sub-Inspector and eight other ranks received commendations or favourable entries in their Record of Service files.
266. Punishment was awarded as follows:
Cautions
Reprimands
...
Severe reprimands
Fines
Reductions in rank Dismissals
...
•
...
...
1965-66
1
1966-67
7
5
5
1
3
3
237 00 m m
8
3
...
22
26
SEARCHES
267. Preventive Service officers searched 806 (1,093) ocean-going vessels within the harbour, and launch crews searched 11,789 (13,445) native craft for narcotics, dutiable commodities and illegal immigrants.
268. A drop in numbers was recorded for the Lowu Border Station. The number of persons who crossed the border and passed through the baggage examination hall this year was 593,322 against 873,391 persons last year. Arrivals from Macau continued to show a rapid growth and this year for the first time incoming passengers from Macau exceeded one million: the relevant figures for the past three years being 680,175, 863,208 and 1,145,216. A spectacular increase in freight and passengers was also dealt with by the Preventive Service at Kai Tak Airport. Items of freight examined were 59,515 (54,350) and of these, 2,913 (2,674) packages were detained for payment of duty. 3,399 (3,345) aircraft were checked during the period. A total of 557,823 (447,674) passengers were processed.
59
269.
Structural alterations to the facilities on the Macau wharves and the hydrofoil berth went some way towards assisting in the process- ing of the increased number of passengers travelling to Macau, and further extension of these facilities is in hand. The number of hydrofoils in service between Hong Kong and Macau has now increased to ten.
270. The increased activity of the Preventive Service in checking abuses in the use of industrial diesel oil in road vehicles caused a slight increase in the number of vehicles checked, 14,179 (14,042) but the main reason for the sharp increase in diesel oil seized (7,770 gallons as against 3,259 gallons during 1965-66) was the concentration on depots which were undertaking the illicit removal of marking solutions for distribution to vehicle owners and operators. There were in all 522 arrests and convictions in relation to the mis-use of diesel oil.
271. Although there were only 192 illicit stills seized this year as opposed to 227 stills seized during the previous year, nearly all of these stills were the large elaborate stills which began to come into promi- nence last year. It is evident that the small distiller did not recover from the effects of the drought three years ago and his place has been taken by large syndicates who can afford to place huge quantities of mash on to ferment and whose distribution of the finished product involves a sophisticated business organization. The large increase in fermenting material seized and destroyed over the year is an illustration of the pressure being maintained by the Service. In all 87,901 gallons were seized this year, compared with 63,247 gallons last year. This amount of fermenting material, if distilled, would have produced 27,474 gallons of Chinese liquor and duty losses thereon would have been $178,581.
272. Preventive Service launches steamed a total of 15,593 (15,930) hours and patrol vehicles ran a total of 187,710 (207,214) miles.
NARCOTICS
273. In order to prevent the import of narcotic drugs, officers of the Preventive Service continued their checks of ocean steamers, partic- ularly those arriving from suspect narcotics ports. Searches of ocean steamers and examination of cargoes were intensified during the period. 806 vessels were searched and 1,658 ocean steamers were guarded and attended for cargo examinations. A total of 88 narcotics seizures were effected.
60
274. The most significant single seizure of narcotics was made on board s.s. 'Tong Hock' which had arrived from Singapore. Special parties searched the vessel for two consecutive days and seized 405.59 lbs. of raw opium in 14 sealed tins which were concealed deep under the vessels starboard bunker oil tank. The vessel's second engineer and two crew members were arrested. They were subsequently sentenced to imprisonment for eight years and five years respectively.
275. A seaman who had come ashore at the western praya was found in possession of 18.57 lbs. of morphine and 5.14 lbs. of morphine hydrochloride in his suitcase. He was subsequently convicted in court and sentenced to seven years imprisonment.
276. 37.15 lbs. of morphine hydrochloride were found cleverly concealed in the fuel intake filter in the engine room of s.s. 'Asmari' arriving from Bangkok on 24th of July, 1966.
277. Another important seizure of 352.73 lbs. of raw opium was made in a consignment of 20 cases of 'Gambier' on board s.s. 'Ragna Bakke' arriving from Penang. Follow up investigation by the Police resulted in an arrest and sentence of fifteen years imprisonment.
278. Acting on information received, officers of the Preventive Service boarded s.s. 'Chekiang' from Bangkok and seized 32.08 lbs. of morphine hydrochloride which was found concealed underneath a bundle of ropes at the stern of the vessel.
BULLION
279. Gold seizures totalled 624.8 lbs. valued at just over two million dollars. Only one of these seizures occurred on a vessel arriving in the Colony, that of 244.2 lbs. in the engine room of the s.s. 'Halvard'. The balance of 380.6 lbs. was seized at Kai Tak Airport being carried by professional bullion smugglers in specially made vests and belts. In all, seven persons were arrested in connection with these offences. In all cases, except the seizure on the vessel where the origin of the gold was unknown, the gold originated in Europe.
COURT ACTIONS
280. The number of court actions for the year was 4,137 an increase of 447 over the previous year. 1,259 arrests were made, a decrease of 80 from last year's figure.
61
281.
years:
The following table illustrates the trends over the last three
Actions
Arrests
Fines
...
:
1964-65
1965-66
1966-67
2,566
3,691
4,137
1,200
1,339
1,259
$212,036
$159,477
$154,816
Details of major confiscations ordered by Courts are given in Table 8 and of dutiable commodities and dangerous drugs in Table 7.
XI. STATISTICS BRANCH
GENERAL
282. The Statistics Branch is responsible for collecting, compiling and tabulating the Colony's trade statistics; for collecting price informa- tion and calculating the Consumer Price Index; for editing and publish- ing the monthly Statistical Supplement to the Government Gazette; for compiling a monthly list of selected economic indicators; for managing a punched-card data processing installation and for supplying statistical information and advice to other branches of this Department, to other departments and to a large number of outside concerns. Since October 1966, this Branch has also assumed the responsibility for implementing and enforcing the Importation and Exportation (Registration of Imports and Exports) Regulations, 1966.
TRADE STATISTICS
New Regulations
283. The Importation and Exportation (Registration of Imports and Exports) Regulations, 1966, came into effect on 3rd October, 1966, and brought about certain changes in respect of the procedure, charges and method of payment concerning import, export and re-export declara- tions. With effect from that date, a charge of $2 was payable in the case of import declarations relating to articles (mostly food items) classified under Section O of the current Imports and Exports Classifi- cation List, irrespective of the value of the articles specified in the declaration. In the case of all other declarations, a charge of $2 was payable where the value of the articles specified in the declaration did
62
DETAR T
ھرا
not exceed $4,000; and where the value of the articles specified in the declaration exceeded four thousand dollars, a charge of two dollars in respect of the first four thousand dollars value and fifty cents in respect of each additional one thousand dollars value or part thereof was payable.
284. The publicity given prior to the enactment of these Regulations and their subsequent enforcement led to an unusually large number of declarations being lodged during the last four months of 1966. This resulted in the distortion of the trade statistics for these months and an apparent inflation of the trade statistics for the year as a whole. The increased coverage of the trade statistics due to quicker and better response on the part of merchants in lodging trade declarations made the recorded figures for 1966 a more accurate reflection of the year's trading, but when compared with the figures for 1965 and for earlier years, the percentage growth in 1966 was exaggerated. It was estimated that compared with 1965, the recorded figures for 1966 overstated the overall growth by about five per cent.
Classification
285. In view of the enactment and subsequent enforcement of the new regulations, no amendments were made to the existing classifica- tions of commodities and of countries. A major revision of the Hong Kong Imports and Exports Classification List would, however, be contemplated in 1967 leading to a new edition of the current list for use as from January 1968.
Trade Declarations
286. A total of 1,092,772 (947,575*) import, export and re-export declarations was received during the year. Of the above total 87,132 (67,734) declarations were collected through the Kowloon Office of the Department. Classified by type of declarations, the figures are as follows:
1965-66
1966-67
Imports Exports
...
412,691
473,973
421,225
484,363
Re-exports
113,659
134,436
*Last year's figure is shown in brackets.
63
287. Some importers and exporters failed to submit their declara- tions within the prescribed time limit and this resulted in a total of 48,303 (115,496) reminders being sent. Queries about incorrect details given on declarations and cargo manifests totalled 51,773 (50,093).
Revenue and Cost
288. Details of revenue collected for the services provided by the Branch during the year ending 31st March, 1967 with comparative figures for the previous year, are shown below:
1965-66
1966-67
$
$
Stamp duty on declarations
...
1,881,588
1,188,870
Ad valorem charges as from 3rd October,
1966
4,414,343
Fees for landing certificates
9,060
8,330
Fees for statistical information
9,945
10,575
Fees for endorsements...
...
3,730
4,400
Total
...
1,904,323
5,626,518
289. The change over from a $2 stamp duty on trade declarations to an ad valorem charge was made in order to collect each year some eight million dollars. This sum of money, less a million dollars earmarked for the preparation of trade statistics, is used to provide over half of the income envisaged for the newly established Trade Development Council. The annual cost of compiling trade statistics including the collection of ad valorem charges but excluding the printing cost is estimated at one and a quarter million dollars.
290. Requests for special statistics continued to be received in the Trade Statistics Section as well as enquiries about Hong Kong's trade in certain commodities or with certain countries, about classification numbers and about the published statistics. The number of personal inquiries received by the section during the year was approximately 12,600 and in addition some 1,200 written inquiries were received of which about 30% related to unpublished information.
291. Ships' cargo manifests received during 1966-67 numbered 51,863 (51,785).
64
Parcel Post Statistics
292. Under the Importation and Exportation (Registration of Imports and Exports) Regulations, 1966, imports and exports by parcel post of articles valued at $4,000 or over are required to be declared and are included in the trade statistics according to their description and country of consignment. For other imports and exports by parcel post (commercial transactions only) figures are compiled from returns com- pleted voluntarily by merchants giving the consolidated monthly total number of parcels and their value. Although efforts were again made during the year to encourage merchants to submit these returns, the response rate is still low as is shown by a comparison of the records. kept in this office with the recorded total number of parcels imported and exported through the Post Office. A total of 438 (535) returns was received during 1966-67. The number and value of parcels declared were as follows:
Despatched:
1965-66
1966-67
...
4,497 $6,814,303
4,075 $3,728,707
Number of parcels
Value ...
Received:
Number of parcels
Value ...
12,550
13,607 $12,813,062 $10,478,078
There is no classification of parcel post items valued under $4,000 into exports and re-exports, and parcels despatched are recorded in the trade statistics as exports.
293. The Value Verification Section was established in September 1966 in order to help with implementation of the Importation and Exportation (Registration of Imports and Exports) Regulations, 1966. The work of this section comprise the following—to verify all declared values exceeding $200,000; to verify a percentage of other declared values selected by means of random sampling; to query when declared values are not in line with average values and to investigate documents of the commercial transactions concerned; to reassess ad valorem charges on under-declared values and to make preparation for prosecution, if required; to scrutinize all declarations in which imports or exports are said to be exempted from the application of the new Regulations; to file all duplicate copies of trade declarations in order of date of lodge- ment, receipt number and machine mark; to deal with applications for refund of over-paid charges; to spot-check ad valorem charges in relation to the values declared; to attend to enquiries in connection with the new Regulations.
65
CONSUMER PRICE INDEXES
294. As from January 1967 two sets of Consumer Price Indexes were published in Special Supplement No. 4 to the Government Gazette. The General Consumer Price Index is based on weights derived from the expenditure of households spending from $100 to $1,999 a month in the Household Expenditure Survey conducted from September 1963 to August 1964, while the Modified Consumer Price Index, calculated on similar lines, derives its weights from the expenditure of households spending less than $600 a month. The Modified Consumer Price Index is used for calculating the variable cost of living allowances for minor Government staff on Scale I.
295. Movements of the General Consumer Price Index:
GENERAL CONSUMER PRICE INDEX FIGURES FOR EACH MONTH FROM
APRIL 1966 TO MARCH 1967 (1963–64 = 100)
Section of Commodity/Service
:
I. Foodstuffs
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
•
All Items
...
...
•
Weights
attached
Apr. 1966
May 1966
June 1966
Oct. 1966
Dec. 1966
48.3 104 104111119111 109 106 106 108 113 113 112
15.2 102 102 102 102 102 102 102 102 102 102 102 102
3.0 99 99 99 99 99 99 100 100 100 101 101101
3.3 104 104 106 106 106 106 106 106 106 106 106106
6.2 99 99 99 96 96 97 98 98 98 99 98 98
2.1 101 102 102 102 102 102 102 102 102 102 102 102
4.2 102 102 102 102 101 102 102 102 102 102 102 102
3.2 101 102 102 102 102 102 102 102 102 102 102 102
14.5 104 104 104 104 105 105 105 105 105 105 107 105
100.0 103 103 106 110 106 106 104 104 105 108 108 107
66
Mar. 1967
296. During the period under review the General Consumer Price Index rose from 103 in April to 106 in June and 110 in July. From this peak it dropped to 106 in August, 104 in October and 105 in December, and again advanced to 108 in January 1967 and closed at 107 in March. Movements in the index were influenced mainly by the fluctuations in the foodstuffs index and to a lesser extent by the changes in other sections of commodities/services. The sharp rise in July was due to the spiralling of the retail prices of the major items of food following the disastrous rainstorms in mid-June while the higher index for January-March was attributable to rise in the prices of foodstuffs and clothing in certain service charges on the advent of the lunar new year.
297. Movements of the Modified Consumer Price Index:
MODIFIED CONSUMER PRICE INDEX FIGURES FOR EACH MONTH FROM
APRIL 1966 TO MARCH 1967 (1963-64 =
100)
Section of Commodity/Service
Weights
attached
Apr.
1966
May 1966
June 1966
July 1966
Aug. 1966
Sept. 1966
I. Foodstuffs
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
55.6 105 105 112 120 112 110 106 107 109 114 114 113
12.9 102 102 102 102 102 102 102 102 102 102 102 102
3.0 100 99 100 100 100 100 101 101 101 102 102 102
100 101
4.2 104 104 106 106 106 106 106 106 106 106 106 106
4.9 99 99 99 96 96 97 98 98 98 99 98 98
1.5 102 103 103 103 103 103 103 103 103 103 103 103
4.1 102 102 102 102 101 102 102 101 102 102 102 102
2.8 100 100 100 100 100 100 100 100 100 100 100 100
11.0103 103 103 103 104 104 104 105 105 105 107 105
All Items
100.0 104 104 108 112 108 106 104 105 106 109 109 108
67
Oct. 1966
Nov. 1966
Dec. 1966
Jan. 1967
Feb. 1967
Mar. 1967
298. Movements of the modified Consumer Price Index followed the same trend as the general Consumer Price Index although in ten months out of twelve it was at a higher level of one to two points.
299. In the following table are shown a series of twelve-month moving average figures for both the general and the modified Consumer Price Index. These average figures for periods of twelve months smooth out seasonal movements and show the underlying trend of price movements.
300.
CONSUMER PRICE INDEX: MOVING ANNUAL AVERAGE
Period
Average for the period of 12 month
General C.P.I.
Modified C.P.I.
Nov. 1965
Jan. 1965 — Dec. 1965
Feb. 1965 - Jan. 1966
Mar. 1965
Feb. 1966
Sept. 1964 Aug. 1965
Oct. 1964- Sept. 1965
Nov. 1964 — Oct. 1965
Dec. 1964
•
102.1
102.3
101.7
101.7
101.6
101.7
...
:
101.8
101.8
102.0
102.3
...
102.3
102.6
102.6
102.8
:
Apr. 1965-
Mar. 1966
102.8
103.1
...
Aug. 1965
May 1965 - Apr. 1966
June 1965 - May 1966
July 1965-June 1966
July 1966
Sept. 1965 Aug. 1966
102.9
103.3
:.
:
103.1
103.6
103.5
104.2
Oct. 1965- Sept. 1966
:
:
104.1
104.9
...
104.3
105.3
104.5
105.5
...
Nov. 1965 — Oct. 1966
Dec. 1965
Nov. 1966
Jan. 1966 Dec. 1966
Feb. 1966 Jan. 1967
Mar. 1966 - Feb. 1967
Apr. 1966
104.4
105.3
...
104.4
105.3
:
:
:
104.7
105.6
105.1
106.1
105.5
106.6
...
Mar. 1967
105.8
106.9
68
RETAIL PRICE INDEX
301. The retail price index was calculated monthly and the figures for the end of each quarter on the basis of March 1947=100 were as follows:
Food
Rent
...
...
...
Clothing, including footwear
Fuel
...
Electric light...
Cleaning
·
Education
Tobacco and cigarettes
Doctor and medicines
Fares...
Household equipment
June Sept. Dec. Mar.
1966
1966
1966
1967
142
143
147
156
119
119
119
119
**
...
115
115
115
116
113
113
113
113
54
54
54
54
96
97
98
98
140
140
140
140
.
134
...
19
134
134
134
105
...
105
105
105
102
102
102
102
129
130
130
132
...
141
141
141
141
153
153
153
153
104
104
104
104
100
100
100
100
131
132
134
139
Hair dressing
...
Newspapers and stationery
Shoe repairs
Rates
General Retail Price Index ...
302. The average for the year of the general retail price index was 135, a rise of seven points from the average for the previous year. There was a peak of 143 in February, 1967, due to higher prices during the Chinese New Year period, and the index at 137 for July was occasioned by high prices of foodstuffs as an aftermath of the rainstorms in June. The lowest index during the year was 130 for April 1966.
CONTINUOUS HOUSEHOLD EXPENDITURE SURVEYS
303. The series of monthly surveys instituted in July 1965 for the purpose of keeping under constant review the weights and commodities used in the Consumer Price Index was continued of households taken from the 1961 Census records, it was necessary to select another random sample of households from records of the 1966 By-Census. One out of every 12 households was chosen from the entries in the enumerator's record books, and a total of 2,369 households was thus selected, 714 in Hong Kong and 1,655 in Kowloon and New Kowloon. Since the particulars relating to these households were comparatively recent, it was considered adequate to approach a specified number of households
69
for co-operation at the end of each month for the survey of the follow- ing month, instead of carrying out a complete preliminary enquiry im- mediately after the selection of the sample.
304. The continuous survey covered 714 households consisting of 3,793 persons during the period from April 1966 to March 1967, or 1,193 households consisting of 6,455 persons since its commencement in July 1965. Variations in the expenditure patterns as obtained in this series of continuous surveys compared with those of the main survey conducted from September 1963 to August 1964 are shown below:
Section of commodity/service
Main Survey 1963-64 ($100-$1,999)
%
Continuous
Surveys
July 1965- Difference March 1967
($100-$1,999)
%
%
I. Foodstuffs
46.0
44.2
- 1.8
...
II. Housing
14.5
16.2
+1.7
III. Fuel and light
2.8
2.5
-0.3
...
IV.
Alcoholic drink and tobacco...
3.1
2.7
0.4
V. Clothing and footwear
5.9
6.0
+ 0.1
VI. Durable goods..
2.0
2.0
VII.
Miscellaneous goods
4.0
4.0
VIII. Transport and vehicles
13.8
13.3
- 0.5
...
IX. Non-consumption payments
4.7
5.8
+1.1
100.0
100.0
INDUSTRIAL PRODUCTION STATISTICS
Future development
305. A Sub-committee on Industrial Production Statistics was appointed by the Trade and Industry Advisory Board on 25th March, 1966 with the following terms of reference:
(a) to consider and to recommend to the Board what industrial production statistics should be collected and published in Hong Kong, bearing in mind:
(i) the uses to which the statistics will be put;
(ii) the resources available for and the cost of their collection, analysis (including the facilities for data processing) and publication;
(iii) the reluctance of factories to supply information;
70
(b) in the light of the failure of the previous attempt to collect industrial production statistics, to advise what staff, equipment, and administrative arrangements are necessary to ensure success in the collection of such industrial production statistics;
(c) to consider whether any legislation is required, and, if so, to
draft appropriate instructions for the Legal Department; and (d) to present to the Board a comprehensive report and recommenda-
tions by 1st August, 1966.
306. The Committee met on three occasions during the year and a report was submitted to the Board in March, 1967. The proposed scheme envisaged the development of industrial production statistics in two phases—the first to relate to existing data and to the laying of the foundations for a census of industrial establishments in 1970 or 1971 which would mark the beginning of the second phase. The Board agreed with the recommendations made in the report and stressed the desir- ability of taking early action to implement them. The cost of such a scheme, estimated at $440,000 per annum, was considered to be fully justified. These recommendations will be submitted to the Colonial Secretariat.
307. Quarterly returns were collected from spinning and weaving mills registered with the Department. The production figures of cotton yarn, cotton fabrics and woollen yarn are given below:
Cotton fabrics Wool yarn
1964
1965
...
1966
...
1966 1st quarter
2nd quarter
3rd quarter
4th quarter
:
Cotton yarn
(mn. lbs.)
(mn. sq. yds.) (mn. lbs.)
260.91
579.19
12.26
288.89
649.85
17.44
292.13
673.85
16.67
68.38
159.37
3.87
72.40
169.92
4.50
74.73
169.34
4.24
76.62
175.22
4.06
308. The number of cotton spindles, cotton looms and wool spindles has increased considerably during the past three years, as shown below:
Cotton spindles
End of year
Cotton looms
Wool spindles
1964
1965
715,500
20,709
32,680
...
...
...
724,722
21,198
35,422
1966
...
749,362
22,016
39,331
71
309. Retained imports of raw cotton, cotton yarn and wool tops during the years 1964 to 1966 are as follows:
1964 1965
1966
Raw cotton
(mn. lbs.)
287.06
292.14
Cotton yarn
Wool tops
(mn. lbs.)
(mn. lbs.)
31.82
12.83
21.30
14.61
35.45
14.13
333.46
RESEARCH
310. The newly created Research Section suffered a setback in its anticipated expansion owing to the failure to recruit qualified candidates to fill two vacancies of Assistant Statisticians. The Section continued to perform the routine duties, viz. preparing statistical tables for Departmental monthly, quarterly and annual reports, answering questionnaires from the U.N.O. and its specialised agencies, collating basic economic data, and compiling a monthly series of selected short- term economic indicators.
311. Other research included exercises on trade with selected coun- tries, calculations of import and export average prices (unit values), an analysis of discrepancies in trade statistics of Hong Kong and other countries, an end-use analysis of imports in 1966, the preparation of a report on future industrial production statistics, and a statistical review of Hong Kong's overseas trade in 1966.
PUBLICATIONS
312. For the monthly Statistical Supplement to the Government Gazette, the Branch continued to collect and edit returns from public companies and other Government departments. To this supplement were added a monthly series of incoming visitors to Hong Kong by nation- ality, the modified Consumer Price Index and its moving annual average. The publication of the Retail Price Index in the supplement was dis- continued as from January 1967.
DATA PROCESSING
313. The machine room is responsible for the monthly tabulation of the Colony's trade statistics, commodity-by-country (published) and country-by-commodity (unpublished). For 1966, a special supplement was tabulated and issued, setting out annual trade statistics by commodity groups and divisions within countries. Each month, some 70 special
7.2
returns on trade statistics are prepared for consulates, trade commis- sions and merchant houses, either by countries or by commodities. Other work on trade statistics was undertaken during the year on summary tables for the statistical supplement to the Government Gazette, analyses of re-exports by country-of-origin, cotton textiles returns for the G.A.T.T. and the International Cotton Advisory Com- mittee and analyses of trade declarations by broad value groups.
314. Work undertaken for the Education Department comprised the compilation of annual and bi-annual statistical returns on school enrol- ments, and the processing of pre-examination data for the Secondary School Entrance Examination, the English School Certificate Examina- tion and the Chinese School Certificate Examination. The processing of results of these examinations started in May; the tabulating of examination results for publication and the listing of results of candi- dates for each school were completed in early August. Further work included listing certificates of pass and statements of full results for each candidate.
315. For the Water Authority, facilities in computing and tabulating were provided for the analysis of hydrological data collected in the water resources survey, 1965-66; and cards were punched and verified for the Authority's water accounts.
316. Special services rendered to other government departments included the processing and tabulating of returns on personal incomes analysed by family status and by income groups for the Inland Revenue Department; analysis of the domestic accidents sample survey, 1966, and the measles vaccines trial of 1966 for the Urban Services Department.
317. Other data processing matters dealt with in the machine room on a routine basis comprised the compilation of monthly, quarterly and annual returns on industrial and occupational accidents for the Labour Department; monthly analysis of death statistics for the Registrar General's Department; filing of meteorological reports and reproducing of punched cards with meteorological information collected from ships' log books for the Royal Observatory. The Type 555 calculator was made available for the Stores' Department for four days each month.
318. Many hours of overtime work were necessary from time to time, especially during April, June and July, in order to meet deadline dates and to catch up work already delayed. During the year under review, more than four million cards were consumed.
73
CONFERENCE OF ASIAN STATISTICIANS
319. Mr. K. L. NG, Statistician, represented Hong Kong at the seventh session of the Conference of Asian Statisticians held in Bangkok from 13th to 24th June, 1966. The hearing and subsequent knowledge of the experiences and achievements of other countries in their statistical development, and the personal contacts established at sessions of this conference had proved invaluable to Hong Kong in the field of statistics.
XII. ADMINISTRATION AND ACCOUNTS BRANCHES
GENERAL
320. Prior to 1st November the Administration Branch was headed by an officer holding the departmental post of Senior Accountant and Secretary. However, in recognition of the increasing burden placed upon this officer arising from expanding commitments and the need for the services of a professional accountant, this post was abolished and replaced by two separate officers, one of Treasury Accountant and one of Secretary. The Treasury Accountant is responsible for departmental financial control (including accounting for the expenditure of overseas offices) and all stores matters, while the Secretary of the Department, a Senior Executive Officer Class 1, continues to be responsible for staff and establishment matters, as well as general administrative control. There are four Executive Officers in the branch who perform account- ing, personnel and general functions.
Overseas Offices
321. During the year two new overseas offices were opened in Geneva and Washington. Details are given in paragraphs 120-128 above.
322. The Sydney Office became part of the responsibility of the Trade Development Council in April, although the officer-in-charge, Mr. W. E. MANSON, remains a Government Officer on secondment to the Council.
323. Government now has four overseas offices which are serviced and administered by this department-the London Office which is primarily responsible for liaison with the British Government, the Brussels Office which is primarily responsible for watching the develop- ment of the European Economic Community, the Geneva Office which
74
is primarily responsible for reporting on proceedings in the General Agreement on Tariffs and Trade and United Nations Conference on Trade and Development and the Washington Office which is primarily responsible for protecting Hong Kong's commercial interests in the U.S.A., Hong Kong's largest market.
ORGANIZATION AND PERSONNEL
Departmental Organization
324. As a result of the transfer of export promotion responsibilities to the newly created independent Trade Development Council, and an increase in commitments involving textile negotiations both here and abroad, a number of important changes were made in the organization of the department, especially at Deputy Director and Assistant Director level. The Deputy Director (Trade & Industry) was retitled Deputy Director (Commercial Relations) and took over responsibility for the Overseas Trade Branch in addition to the Textiles Division. A new Industry Division was formed including the Industrial Development Branch, the Certification Branch and the Industry Inspection Branch. This Division was taken over by the other Deputy Director who was retitled Deputy Director (Administration & Industry). An organization chart of the Department as at 31st March, 1967 is shown at Table 9 with divisional staff establishments given in brackets.
Senior Staff Movements
325. Mr. D. R. HOLMES, Administrative Officer Staff Grade A, was Director of Commerce and Industry until 2nd November when he became the Secretary for Chinese Affairs. Mr. T. D. SORBY, Administra- tive Officer Staff Grade B1, who was a Deputy Director of the Depart- ment prior to going on vacation leave in April, was appointed to succeed Mr. HOLMES.
326. Mr. E. I. LEE, Administrative Officer Staff Grade C, who was Assistant Director (Controls) and Assistant Commissioner of the Preven- tive Service, left on vacation leave on 2nd September. He was succeeded by Mr. I. F. C. MACPHERSON, Administrative Officer Staff Grade C.
327. Mr. S. C. PASCOE, Senior Executive Officer Class I, replaced Mr. T. V. C. REYNOLDS, Senior Executive Officer Class II, as Senior Accountant and Secretary on 23rd July.
75
328. Mr. M. O'CONNOR, Treasury Accountant, was transferred to the Department on 1st November to fill the new post referred to in para- graph 320.
Establishment
329. The year began with an approved establishment of 1,415 includ- ing 737 posts in the Preventive Service. Staff increases approved for the new financial year amounted to 155 posts which included 81 posts for the Industry Inspection Branch and 51 posts for the Preventive Service.
330. The Department was closely involved in the setting up of the Trade Development Council, the Provisional Productivity Council and the Export Credit Insurance Corporation, and a number of departmental officers were seconded to these organizations to assist in their establish- ment and pending the recruitment of their own staff. As mentioned at paragraph (48) of this report all three organizations have now became statutory bodies.
331. A permanent post of Manager was created for the Export Credit Insurance Corporation. The duties and responsibilities of this post were to assist the Commissioner-designate of the Corporation in the training of staff in all aspects of credit insurance underwriting prior to the formal establishment of the new organization. Mr. D. C. W. HILL, a Principal with the Export Credit Guarantee Department of the Board of Trade in London, took up the post in May, on temporary transfer for three years.
332. Owing to pressing commitments which could not be foreseen at the time when the staff estimates for the year were being prepared, increases in the departmental establishment were sought by supple- mentary provision, particularly for the Textiles Division and the Statistics Branch. Additional posts for the former were needed as a result of revised procedures which stemmed from various negotiations concerning quota-controls on textile exports from Hong Kong, and a new ad valorem levy on statistical declarations of imports and exports which was introduced in October entailed more staff, mainly clerical, in the Statistics Branch.
333. An important feature of the Staff Estimates was the creation of a number of supernumerary posts to facilitate the continued second- ment in 1967-68 of officers to the three statutory organizations already mentioned in this chapter. 27 posts were created and a corresponding
76
number of permanent posts were abolished following the disbandment of the Export Promotion Division of the department, the Sydney Office and part of the London Office on the setting up of the Trade Develop- ment Council. Staff increases totalling 73 posts (this figure refers to the number of new posts requested and excludes supernumerary posts which were recommended for renewal) were submitted to the Establish- ment Branch of the Colonial Secretariat for consideration. Of the 73 posts requested, 44 were approved. Individual requests included:
29 posts for the Preventive Service
17 posts for the Industry Inspection Branch
4 posts for miscellaneous purposes
23 posts in the General Grades.
Recruitment
334. The Administration Branch undertook ten separate recruitment exercises to fill vacancies in the grades of Assistant Trade Officer, Industry Assistants Classes I and II, Revenue Sub-Inspector, Woman Revenue Sub-Inspector, Assistant Revenue Officer, Woman Assistant Revenue Officer and Punch and Verifier Operator. 148 newly appointed officers assumed duty during the period. Recruitment to the grades of Assistant Trade Officer and Industry Assistant Class I were particularly important. Response to advertisements in both the English and Chinese language newspapers was generally impressive. The Branch continued to do its best to reduce the time taken in processing candidates for appointment.
Training
335. Mr. S. W. LIM, Assistant Trade Officer, returned from Geneva in August after attending a six-month training course organized by G.A.T.T. In January, Mr. D. C. W. SUM, Assistant Trade Officer, left Hong Kong to attend the same course.
336. Five Executive Officers attended establishment training courses during the year. A number of professional officers and Preventive Service officers also attended different study courses during the period under review.
337. The Department's application for funds in 1967-68 for Courses of Instruction were approved. It was intended that four Preventive Service officers should be attached to H.M. Customs and Excise for training, and that one Assistant Trade Officer should attend an Industry Development Course at the Hague.
77
OFFICE ACCOMMODATION
338. With the continued growth of the Department the problem of adequate office accommodation remained pressing. In October it became necessary to provide an office for the collection of the new ad valorem levy on import and export declarations. A storeroom on the ground floor was converted for this purpose.
339. The transfer of the Secretariat for Chinese Affairs in November from the 1st floor of Fire Brigade Building afforded the opportunity to acquire much needed additional accommodation within Headquarters. This made possible the return of the Industrial Development and Overseas Trade Relations Branches which were previously accom- modated in Li Po Chun Chambers, and allowed the Certification Branch's main office to move to the first floor, which in turn resulted in urgently needed extra space for the Textiles Division on the second floor.
340. Although the position has for the moment improved in Fire Brigade Building, additional staff required to meet increasing commit- ments will continue to put a strain on accommodation. Plans are being considered for the accommodation of the Preventive Service in the new Rumsey Street car park building to be built in about two years' time.
341. The Kowloon Excise Station of the Preventive Service expected to move into new accommodation on the Marine Deck of the Ocean Terminal in mid-April, 1967, when alterations had been completed. Another office was being sought at the shopping floor level for the con- venience of the public since the Marine Deck is a restricted area.
342. In order to improve existing accommodation for the Kowloon Office in the Hong Kong and Shanghai Bank Building, Mongkok, approval was obtained in February for the removal of the offices to another floor within the building which would increase the area and provide a much better lay-out.
343. Planning continued for the provision of offices in the new Marine Pier situated on the Central Reclamation, which is expected to be completed in July, 1967. Arrangements have been made for the Special Section of the Preventive Service, which is at present housed on the ground floor of Fire Brigade Building, to move to the East Arm of the Pier; the Marine Section will also move to new accommodation in the West Arm. The transfer of both sections to the new pier will increase their operational efficiency.
78
WELFARE
344. Staff Welfare is the responsibility of the Deputy Director, Administration and Industry, who is assisted by the Secretary.
Departmental Quarters
345. The Preventive Service North Point Quarters were officially opened on 28th June. They provide 121 units housing members of the rank and file and their families. Another scheme to provide flats in Kowloon for 300 rank and file officers was up-graded to Category 'B' in the Public Works Programme. A site at Shan Kwong Road has been reserved for this purpose.
Revenue Inspectors' Mess
346. The Mess continued to be the venue for a number of successful social functions, the highlight being the Annual Christmas Dance. Throughout the year many members of the Headquarters staff made use of the dining facilities of the Mess for their mid-day meal.
Clerical Canteen
347. The Canteen, which is used primarily by junior officers of the Preventive Service and clerical staff working in Fire Brigade Building, functioned as usual during the period under review.
Revenue
XIII. ACCOUNTS AND STORES
348. Net revenue collected by the department amounted to $324,611,902 ($264,801,297), an increase of 22.6%. (See Table 10). This was 17.9% of all recurrent revenue collected by Government during the year. Details of revenue for dutiable commodities are given in Tables 5 and 6.
Expenditure
349. Supplementary provision of $794,403 over the estimate of $17,928,148.20 (excluding $3,714,151.80 earmarked for the Trade Devel- opment Council which was frozen) was approved during the financial year. The total departmental expenditure amounted to $15,839,109.05. Funds provided under Special Expenditure Sub-heads in respect of
79
(a) the Productivity Centre were underspent; and
(b) the Export Credit Insurance Corporation were recovered in full
before the close of the financial year.
Stores
350. A Stock Vertification conducted by the Treasury revealed some minor discrepancies, but this apart, the section functioned satisfactorily despite the fact that it is inadequately housed in several different locations.
351. Confiscated liquor, tobacco and cigarettes continue to be sold at an authorized rate equivalent to the retail price less 20%, but without any warranty as to condition. Free issue were confined to certain approved charitable organizations. Compared with last year, the quanti- ties of items sold or issued free and their respective values were as follows:
Sold:
Liquor
...
...
Cigarettes
Cigars
Tobacco
Distributed free:
1965-66
1966-67
...
Quantity
11,853 bots. 391,200 pcs. 2,180 pcs. 2 lbs.
Value
$23,889
Quantity
Value
24,081 bots. 153,300 pcs.
$42,762
10,552
11,051
47
5,943 pcs. 2 lbs.
47
+
Total
$34,488
Total
$53,860
1965-66
1966-67
Quantity
Value
Quantity
Value
Liquor Cigarettes
...
3,671 bots. 468,924 pcs.
$18,355
4,958 bots.
$20,282
14,980
577,947 pcs.
18,076
Tobacco Cigars
619 lbs.
2,847
254 lbs.
1,253
3,250 pcs.
350
Total
$36,182
Total
$39,961
352. 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 ceiling is fixed at $200,000, sums in excess of this amount being transferred to general revenue.
80
Total credits during the year resulting from sales and issues to other departments were:
Revenue Head 1 Duties: Subhead 2-Liquor
Revenue Head 1 Duties: Subhead 4-Tobacco
Revenue Reward Fund
$14,765
1,994
...
13,270
$30,029
353. In view of the large amount of revenue collected from the taxation of dutiable commodities, the Audit Department conducts a running audit of the department's accounts with particular regard to assessments of duty on dutiable commodities.
Welfare Funds
354. The Department operates two Welfare Funds, one for members of the Preventive Service and the other for the civilian staff, the latter being relatively small. The Preventive Service Welfare Fund is estab- lished 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 amounting to $1,700.00 and loans amounting to $3,390.00 were made during the year to help to meet various costs, e.g. hospitalization, funeral, and education, in respect of serving and retired officers and their dependants. Purchases amounting to $1,412.59 were authorized for the general welfare of the Preventive Service, e.g. electric rice-cooker, kitchen utensils.
4th January, 1968.
T. D. SORBY,
Director of Commerce and Industry.
81
TABLE 1
EXPORTS OF COTTON TEXTILES RESTRAINED UNDER G.A.T.T. COTTON TEXTILES ARRANGEMENTS
FROM OCTOBER, 1961 TO SEPTEMBER, 1967
Restrained Countries
5th Long Term Year 1966-67
4th Long Term Year 1965-66
3rd Long Term Year 1964-65
2nd Long Term Year 1963-64
1st Long Term Year 1962-63
Short Term Year 1961-62
Unit
Restraint Limit
Restraint Limit
Exports
Restraint Limit
Exports
Restraint Limit
Exports
Restraint Limit
Exports
Restraint
Limit
Exports
U.S.A.
Sq.yd.
338,625,000 (All cotton textiles)
|322,500,000(1) 349,010,637 274,712,288 273,255,307
251,112,600 243,386,600 231,144,890 227,157,291|231,144,890 244,858,353(4)
Canada
Doz.
736,000
(All cotton textiles)
736,000
(37 categories)
(36 categories)
(30 categories)
(30 categories)
634,022 712,000 599,243
(6 garment
(6 garment
(7 garment
categories)
categories)
categories)
categories)
Sq.yd.
11,090,000
(All fabrics
9,406,000 (11 fabric categories)
8,846,288
6,000,000
4,728,883
N.A.
614,000 484,595 600,000 (6 garment
(6 garment categories) 5,863,113 N.A.
517,954 385,000
(4 garment categories)
400,138(4)
5,994,087 N.A.
1,021,486
(6 fabric categories)
82
Federal
Republic of Germany
Doz.
including 5 specific categories)
77,000,000
(sq.yd.)
400,000
399,884
380,000 339,167(3)|
350,000
309,139 N.A.
347,987 N.A.
214,027
(Woven
(7 groups)
nightwear)
Norway
Doz.
23,000
22,000
22,000
20,000
19,788
18,000
16,951
16,000
15,960 N.A.
46,897
(Woven
nightwear)
Doz.
66,000
61,000
23,850
56,000
31,790
51,000
45,389
46,000
44,975 N.A.
70,609
(Woven sport
& work shirts)
Benelux
Pcs.
750,000(2)
1,251,517
1,053,245
N.A.
1,539,648
N.A.
1,152,300 N.A.
1,015,320 N.A.
622,812
(Woven shirts)
(1) A further 35.6 million sq, yds, was added to the first bilateral year limit on a once-and-for-all basis to take account of trade
during 1965–66 in unsuspended, unrestrained categories which were caught by the retroactive nature of the agreement.
(2) From 1st January to 30th September 1967. All previous exports based on calendar year.
(3) Period for utilization of quota extended to 31st December, 1965.
(4) The total exports were higher than the aggregate limits. By the time restraint requests for some categories were received during the Short Term Year, and notional restraint limits were established in accordance with the 15 month roll-back formula, actual shipments had already exceeded these limits.
N.A. not applicable.
=
83
TABLE 2
EXPORTS OF RESTRAINED COTTON TEXTILES TO BRITAIN
1963 to 1967
1963 (c)
1964 (c)
1965 (c)
1966
1967
Description
Unit
Group Limit
Exports
Group Limit
Exports
Group Limit
Exports
Group Limit
Exports
Group Limit
Yarn
Lbs. 6,300,000
6,300,000 6,300,000
Loomstate Piecegoods... Sq.yds.
100,000,000 (a)
Finished Piecegoods Sq.yds.
Made-ups and Garments Sq.yds. 85,000,000
79,999,700
19,054,265
84,611,060 86,811,189
102,130,811 (b)|
11}
6,241,132 6,300,000
81,688,535
20,356,877
86,749,784 89,825,838
|105,682,162 | (6)]
6,225,010
113,582,250(d),
21,587,146
59,832,933
6,300,000
6,149,452 6,363,000
78,360,590
185,000,000(e) 26,538,616 186,850,000(e)
83,409,290,
Miscellaneous Cotton
Manufactures
Sq.yds.
2,300,000
1,586,005 2,388,101
Note:
(a) In 1963, sub-limit for finished piecegoods was 30 million sq. yds.
(b) In 1964 and 1965, group limits for piecegoods, made-ups and garments groups included a total supplementary quota
of 14,454,000 sq. yd. Sub-limit for finished piecegoods was 30 million sq. yds.
(c) Export figures for 1963, 1964 and 1965 included shipments made during the carryover period in the subsequent year.
(d) Made-ups and garments quota could be shipped as piecegoods under the special shipment arrangements in late 1965
(e) Group limits for finished piecegoods, and made-ups and garments:
Finished Piecegoods
1966
30,000,000 sq.yd.
1967
30,300,000 sq.yd.
Made-ups and Garments...
85,000,000 sq.yd.
85,850,000 sq.yd.
84
TABLE 3
CERTIFICATION OF ORIGIN STATISTICS
Year
1964-65
No. Issued
Value of Goods Certified $Mn.
No. Issued
Certificates
(Percentage
Change)
(Percentage Change)
(Percentage Change)
Standard Certificates of
Origin
145,098
(+2.2)
1,230.7 (+18.7)
131,701
(-9.2)
1965-66
Value of Goods Certified $Mn. (Percentage Change)
1966-67
No. Issued (Percentage
1.300.2
139,705
(+5.6)
(+6.1)
Change)
Value of Goods Certified $Mn. (Percentage Change)
1,546.9 (+18.9)
Commonwealth Pre-
ference Certificates:
(a) Britain
74,029
940.4
**
74,209
905.1
80,522
(+1.0)
297,123
(+3,4)
(+0.2)
275,890
(-3.8)
(+8.5)
287,731
(b) Other Countries
38,937
(+3.8)
(+2.9)
228.5 (+20.3)
31,676
(-7)
178.9
27,052
(+4.3)
(-18.6)
(~2.2)
(-14.6)
956.9 (+7.2) 156.7 (-12,4)
Comprehensive Certi-
ficates of Origin:
(a) Commercial
39.059
38,300
40,452
(+17.7)
(-1.9)
(+5.6)
(b) Mail Order
23,413
30,846
22,808
(+26.7)
(+31.7)
(-26.1)
(c) Tourist...
100,890
658.2
90,387
782.5
82,780
(-9.7)
(+20.0)
(-10.4)
(+18.9)
(-8.2)
842.3 (+7.6)
(d) Gift Plan
12,550 121,958
10,215
(-9.0)
(-8.7)
(-18.6)
110,840 (-9.1)
7,353
100,689
(-28.0)
(-9.2)
(e) Sample
8,518
10,238
10,556
(+5.2)
(+20.2)
(+3.1)
Total ...
442,494
(+0.9)
3,057.7 (+13.9)
417,572
(-5.6)
3,166.7 (+3.6)
411,228
(-1.5)
3,502.8 (+10.6)
Domestic
Exports
($Mn.)
4,590
Percentage
66.6
5,116
62
5,921
59.1
Certified
Value of stamp fees
paid (Including miscellaneous certi- ficates, not recorded above)
$4,702,155
$4,453,585
$4,525,480
85
TABLE 4
TRADE COMPLAINTS FROM OVERSEAS COMPANIES OR INDIVIDUALS
HANDLED BY THE DEPARTMENT
FROM 1.4.1966 to 31.3.1967
Country
Africa
Category
Australia
Central Europe and New & South (Exclud-
Zealand America |ing U.K.)
Miscel-
Middle East
U.K. U.S.A. laneous
Countries
Total
Non-delivery
6
55
14
38
25
43
440
27
648
Outstanding debts
36
8
17
26
27
12
21
15
162
Inferior quality
8
6
2
9
5
12
16
5
63
Breach of contract
1
1
1
1
6
10
Short-shipment
2
3
2
1
1
9
Infringement of trade
marks
...
Infringement of patents &
designs ..
Miscellaneous
1
2
2
5
1
10
2
13
7
12
1
10
7
15
48
17
117
Total
60
82
38
88
...
64
100
530
65
1,027
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:
:
Locally Manufactured Liquor
Intoxicating Liquor
Spirituous liquor other than
intoxicating liquor
Table Waters
Tobacco
Hydrocarbon Oils
Total:
:.
:
TABLE
5
DUTY FROM DUTIABLE
COMMODITIES (GROSS)
1964-65
1966-67
1965-66
Unit
Quantity
% age Change
Duty
% age Change
Quantity
% age Change
Duty
% age Change
Quantity
%% age Change
Duty
$
Gallons
118,255
**
247,371
199
40,963
55
138,513 7,481,808
""
16,766
"J
2,087,863 1,164,408
"
200,135
2,855
++ + ++++++
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
3.6
+ 46.8
14,509,957 10,922,343
+!
++++++
16.2
23.7
127,254
19.6
268,034
10.0
24.1
44,906 142,668
16.7
7,996,576
17,165
4.4
44.8
2,071,519 1,411,998
54.8 49.0
2,323,817 + 36.3
53,726
+ 62.7
145,775 2,783
11,498,937 + 18.8
74,069,596 + 18.2
12,228,678
% age Change
++++++
7.6
8,320,674
8.3
19,305,516
9.6
3,036,177
3.0
2,958,217
6.9
15,276,598
2.4
1,201,243
+1
0.8
21.3
-
+
27.2 2.5
6.3 79,350,990
14,418,550 12,847,592
1,946,027 40,396
+1
++++++
7.8
140,329
8.1
314,234
9.8
48,306
2.8
170,276
10.1
3.5
9,328,449 21,150
++++++
10.3
17.2
9,209,095 22,722,292
7.6 19.4 16.7
3,248,485
3,554,495 18,109,228
23.2
0.6
-+
17.6
1,916,031 1,614,559 + 14.3
—
7.5
1,484,558
13,305,759 15,177,513
++++++
10.7
17.7
7.0
20.2
18.5
23.6
+1
7.7
18.1
1 I
16.3
24.8
+ 7.1
140,744 3,552
13,697,630
3.5 + 27.6
1,903,006
2.2
+ 12.0
54,984 + 36.1
88,769,415
+ 11.9
Pounds
6,006,851 +
3.0
* 52,134,871 +
13.3
6,189,989
+ 3.0
† 54,296,655
77
85,706
""
"
487,769 16,392,246
++I
5.5
19.5 * 563,033 1,219,425
31.6
5.5
17.8
* 96,355,431
14.1
68,007 446,547
20.7 8.5
453,622
1,116,368
17,178,892
+
4.8 †100,946,814
22,972,572
12.7
150,272,760
5.9
23,883,435
+
4.0
156,813,459
Imp. Gals.
24,856,530
14.5 30,512,062
9.4
""
53,175,778
59
217,237,562
>>
46,496,633
15.4 15.4 5.6
19,007,521
34.0
26,320,710
21,723,756
15.4
4,580,925
5.6
60,473,912 227,421,650
341,766,503 + 13.9
75,824,264 + 16.2
48,394,480
362,610,752
++++
5.9
13.7 4.7
+ 31,913,052
+ 22,966,122 22,742,165
4.1
+
6.1
4,776,154
82,397,493
Gallons
13,184,264 + 16.9
6,328,447
+
16.9
13,010,206
I
* Duty rates increased with effect from 26.2.64.
↑ Duty rates increased with effect from 24.2.66.
86
2,120,822 + 100.0
52,147 + 7.1
284
66.6
49,088,692
26,1
7,923
45.4
51,269,868
-
24.1
+
++│
4.1
5,506,451
11.0
58,817,590
+ 8.3
19.4
66,238
2.6
562,125
23.9
8.5
415,085
7.0
1,037,713
7.0
4.8
11,475,733
33.2
90,361,009
10.5
4.4
17,463,507
26.9
150,778,437
3.8
+1++++
4.6
27,055,054
20.8
66,819,686
4.7
304,354,020
4.3
$1,925,776
8.7
450,154,536
++++
2.8 10.5
38,025,038
30,140,047
33.8
30,435,402
7.3 5,118,764
24.1
++++
19.2
31.2 33.8
7.2
103,719,251 + 25,9
-
1.3
6,244,900
1.3
15,201,590 + 16.8
7,296,765 + 16.8
Refund and Drawback
2,231,590 + 5.2
60,106 61 63,129,674 6,879
65,428,310
+ 15.3
78.5
124,140 3,293,597
35,639 117
+
28.6
-
13.0
+
27.6
53.2
40.7
91.8
32 542,824
48.5
6,291
8.5
36,002,608
45.0
+
Duty rates on Motor Spirit and Diesel Oil for other road vehicles increased with effect
from 24.2.66.
87
TABLE 6
REVENUE FROM DUTIABLE COMMODITIES LICENCES, 1966-67
No. of Licences Issued
Revenue
Importer's:
$
Liquor
336
168,000.00
Tobacco
Hydrocarbon Oils
Table Waters
Methyl Alcohol
77
...
38,500.00
189
97,000.00
38
...
11,400.00
48
480.00
Exporter's:
Liquor
171
...
...
Tobacco
Hydrocarbon Oils
Table Waters
Methyl Alcohol
Dealer's:
European-type Liquor Chinese-type Liquor Spirituous Liquor Tobacco
Hydrocarbon Oils
Methyl Alcohol Medicated Liquor Retailer's:
Chinese-type Liquor
Spirituous Liquor
Beer
Tobacco
Hydrocarbon Oils
Methyl Alcohol
Medicated Liquor Manufacturer's:
Distillers Brewer
...
...
...
...
...
60
5,140.00 2,070.00
41
...
...
900.00
14
...
1,590.00
5
...
50.00
533
2,334
798,150.00 1,440,210.00
463
...
203
443
46,300.00 101,500.00 44,300.00
45
1
:
450.00
50.00
305
: :
...
44,850.00
1,994
180,370.00
4,376
264,600.00
11,335
692,754.00
...
1,131
28,252.50
20
...
...
200.00
11
550.00
14
2
Liquor
Still
Liquor Manufacturer
Tobacco
23
19,000.00
5
...
2
...
6
...
6,000.00
Table Waters
14
:
...
...
10,400.00
Warehouse:
Liquor
...
Tobacco
...
Hydrocarbon Oils
Table Waters
Methyl Alcohol
...
Ship and Harbour Vessel Licences
19
+4
24,070.00
8
11,000.00
19
19,000.00
16
7
950.00
70.00
358
...
Licence Fees for Persons Importing for Own Use
and Miscellaneous
3,580.00
...
35,663.44
Total:
...
24,643
$4,097,399.94
Refunds: Hydrocarbon Oils Licence Fees
100.00
Net Total:
$4,097,299.94
88
TABLE 7
CONFISCATIONS UNDER THE DUTIABLE COMMODITIES ORDINANCE (NO. 26 OF 1963) AND DANGEROUS DRUGS ORDINANCES, CHAPTER 134
Tobacco
COMMODITY
Chinese prepared tobacco
Foreign cigarettes
QUANTITY
UNIT
1965-66
1966-67
£ £ £
586.98 1,339.03
230.05
1,505.19
1,108.38
1,439.68
lb.
59.84
102.45
lb.
46.30
lb.
42.13
376.00
lb.
11.09
30.70
...
·
Macau and Chinese cigarettes
Cigars
Tobacco stems
Tobacco leaf
...
Pipe tobacco
Liquor
European type liquor
Chinese type liquor
Beer
Chinese medicinal wine
Alcohol
Mash
...
Stills
Hydrocarbon Oils
Treated diesel oil
Dangerous Drugs
Opium, raw
Opium, prepared
Opium, dross
Opium, water
**
gal.
910.10
817.56
...
...
gal.
5,308.43
3,579.98
gal.
455.62
1,057.14
gal.
147.79
229.62
...
...
gal.
76.50
119.65
gal.
63,247.00
87,901,00
...
no.
227
172
...
Morphine ...
Morphine hydrochloride...
Diacetylmorphine hydrochloride
Barbitone
Opium pipes
Opium pipe heads
Opium lamps
...
:
...
...
gal.
3,259.50
7,364.25
lb.
...
1,071.63
776.22
lb.
2.68
16.56
lb.
1.23
7.16
fl. oz.
80.80
1,770.8
lb.
21.61
lb.
160.88
79.55
lb.
0.04
8.5
lb.
0.01
52.38
no.
13
22
...
no.
3
16
...
no.
14
29
89
TABLE 8
MAJOR CONFISCATIONS UNDER OTHER LEGISLATION 1966-67
Legislation
Importation and Exportation
Regulations made there-
Ordinance, Chapter 50, and
under
Gold
Commodity
lb.
...
Assorted coins contain-
ing 3,474 kilogrammes of silver
...
Unit
Quantity
469.77
kg.
4.83
Metal coins:
10 centavos
no.
48,650
20 centavos
no.
29,343
50 centavos
no.
6,465
1 peso
no.
3
Silver bars
:
kg.
46.37
Silver granules
kg.
129.29
Granulated metal con-
taining 39.62 kilogram-
mes of silver
kg.
39.94
Brass/copper scraps
Ib.
850
Tin Ingots
no.
59
Tin slabs...
...
no.
15
Gramophone records
...
no.
2,196
Transceivers
set
4
Penicillin Ordinance,
Chapter 137
Streptomycin sulphate
grm.
40
Procaine penicillin G
vial
6
Penicillin G
tube
2
Penicillin G sodium
tablet
24
Dihydrostreptomycin
sulphate
vial
20
Tetracycline hydrochlo-
ride
capsule
7
Pharmacy & Poisons
Chloramphericol
capsule
500
Ordinance, Chapter 138
Dangerous Drugs Ordinance,
Chapter 134
Opium poppy
lb.
31
90
Industrial
Accounts Branch Administration &
Branch Statistics
Development
Branch
Treasury Accountant Senior Executive Offr.
Statistician Senior
Senior
Trade Officer
Accounts and Stores. Personnel.
Internal Administrative Matters.
Trade Statistics.
Economic Statistics.
Consumer Price Index, Retail Price Index.
Data Processing.
Establishment
Permanent
(94)
31st March, 1967
(130)
91
Industrial Aspects of Town Planning.
Liaison with Industrial Organizations.
Trade Complaints.
General Assistance to Industry.
TABLE 9
COMMERCE AND INDUSTRY DEPARTMENT, HONG KONG
ORGANIZATION CHART
DIRECTOR
Administration & Industry
Deputy Director,
Assistant Director,
Industry
Industry Division
Industry
Branch Certification
Branch Inspection
Senior
Trade Officer
Certification of Origin (including Standard
Certificates, Com-
prehensive Certificates
for the American Market and Common- wealth Preference Documentation).
(20)
(80)
Senior
Assistant Director,
Controls
Branches and Trade Licensing Dutiable Commodities
Industry Officer
Trade Officer
Inspection of Factories and Consignments under Cer- tification Requirements, including Investigations and Prosecutions.
(100)
Import and Export Licensing.
Exchange Controls (Licensing Procedure). Strategic Commodities. Reserved Commodities. Collection of Duties on Liquor, Tobacco,
Hydrocarbon Oils, Table Waters, Methyl Alcohol.
Protection of Revenue.
Excise Duties.
Anti-Smuggling Operations (Narcotics).
Commercial Relations Deputy Director,
Textiles Assistant Director,
Preventive Chief Service Preventive
Division Textiles
Relations Branch Overseas Trade
Officer
Senior
Trade Officer
Trade Officer
Commercial Policy (Textiles).
Textile Export Controls. Quotas.
Cotton Advisory Board.
Senior
Commercial Policy (General). Maintenance of the Channels of Trade. Liaison with Trade Development Council and Export Credit Insurance Corporation. Trade and Industry Advisory Board.
(83)
(790)
(47)
(26)
(32)
TABLE 10
NET REVENUE COLLECTED FROM ALL SOURCES
Actual Revenue
Approved Estimates
Increase/ Decrease
1966-67
1966-67
1965-66
69
$
$
$
%
Duties
Hydrocarbon oils imported Intoxicating liquor imported...
103,000,000
103,712,960
82,390,613
+ 25.8
55,000,000
63,940,637
54,639,473 + 17.0
Liquor other than intoxicating
liquor imported
2,000,000
1,922,351
1,926,317
0.2
Tobacco imported
127,000,000
118,235,613
93,683,785
+ 26.2
Liquor locally manufactured...
22,500,000
19,453,051
20,493,504
5.1
Table waters
6,500,000
7,296,648
6,244,839
+ 16.8
Licences
Hydrocarbon oils
200,000
193,172
194,795
0.8
Liquor
3,000,000
3,013,939
2,746,374
Tobacco
880,000
861,764
783,596
+ 9.7 + 10.0
Miscellaneous (table waters) ...
32,000
28,425
28,835
1.4
Fines and Forfeitures
Fines
95
Forfeitures
...
...
...
200,000
Penalties
135,149 275
108,172
+ 24.9
Fees of Court or Office
Denaturing
410,000
381,969
421,916
9.5
Factory inspection and
supervision
7,200
15,476
39,914
J
61.2
*Import and export declarations
4,413,486
Official certificates
15,000
19,650
Official signatures
5,000
2,185
13,575 4,415
+ 44.8
―
50.5
Departmental services and
supervision
112
201
M
44.3
...
Overpayments in previous
years ...
60,220
11,105
Anti-narcotic smuggling guards
10,000
8,610
8,036
Bonded warehouse supervision
380,000
347,229
369,524
Loss of, or damage to
Government property
150
363
Advertisement revenue
696,000
48,290
189 588,947
·+442.3
+ 7.1 6.0
+ 92.1
91.8
Publications
14,000
23,768
15,679
+ 51.6
Surplus and condemned stores
18,963
Miscellaneous
60,500
496,560
...
68,435
+625.6
321,909,850 324,611,902 264,801,297
+ 22.6
* With effect from 3.10.66.
92
GPHK
Printed by the Government Printer
Code No.: 0342767
Price: $5.00