JHON
c73
J
ANNUAL
DEPARTMENTAL
REPORTS
KONG
1967-68
2008.
soof
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 1967 - 68*
PRINTED AND PUBLISHED BY S. YOUNG, GOVERNMENT PRINTER
at the Government Press, Java ROAD, HONG KONG
* 1st April 1967 - 31st March 1968
HK 574 COM 68
2008
EXCHANGE RATES
When dollars are quoted in this Report, they are, unless otherwise stated, Hong Kong dollars. The official rate for conversion to pound sterling is HK$14.54=£1 (HK$1=1s. 41⁄2d.). The official rate for conversion to U.S. dollars is HK$6.06=US$1 (based on £1=US$2.40).
MARINE DEPARTMENT LIBRARY
67629-11K-7/69
CONTENTS
Chapter
1. REVIEW OF THE YEAR 1967-68
2. COMMERCIAL RELATIONS ‘E' DIVISION (EUROPE)
GENERAL
Paragraphs
1 - 57
58 - 60
INDIVIDUAL COUNTRIES
Austria
61
The Benelux Countries
62 - 63
United Kingdom
64 - 68
Federal Republic of Germany
69 - 73
France
74 - 75
Norway
76-78
Republic of Ireland
79
OVERSEAS OFFICES
London Office
Brussels Office
3. COMMERCIAL RELATIONS 'R' DIVISION-REST OF
WORLD (OUTSIDE EUROPE)
80 - 102
103 109
-
GENERAL
110
INTERNATIONAL TRADE ORGANIZATIONS
General Agreement on Tariffs and Trade
(G.A.T.T.) .
111
118
•
United Nations Conference on Trade and
Development (U.N.C.T.A.D.)
119 - 121
United Nations Economic Commission for
Asia and the Far East (E.C.A.F.E.) . International Cotton Advisory Committee
(I.C.A.C.).
122
-
123
124
·
iii
Chapter
Paragraphs
INDIVIDUAL COUNTRIES
Algeria
Australia (including Exports of Cotton Manu-
factures to).
Canada (including Exports of Cotton Manu-
factures to).
New Zealand.
125
Nigeria
·
South Africa.
Sudan
United States of America (including Exports
of Cotton Manufactures to)
OVERSEAS OFFICES
Geneva Office
Washington Office.
4. INDUSTRY AND CERTIFICATION DIVISION
CERTIFICATION BRANCH
General
+
Standard Certificates of Origin
Commonwealth Preference Certificates .
Comprehensive Certificates of Origin
Certificates of Processing
126 - 130
131 134
·
135
136
•
137
138
139 141
-
•
142 146
-
Miscellaneous Certificates
Changes in Certification Requirements in
Various Territories
Certification Co-ordination Committee.
D
Revenue
INDUSTRY INSPECTION BRANCH
147 154
-
155 - 157 -
158 - 160
161 - 165
166 - 173
174
175
176 - 180
•
181 - 186
187
General
•
Inspections
Kowloon Inspection Control .
iv
188
189 - 191
192 - 193
Chapter
Investigations
Prosecutions
·
Anti-Corruption Measures
INDUSTRIAL DEVELOPMENT BRANCH
REVIEW OF INDUSTRY
Textile Spinning .
Textile Finishing
Cotton Knitting.
Woollen Knitting
Wearing Apparel
Plastics
Light Metal Products
•
Electronics.
Hair Wigs.
Machinery
•
Paragraphs
194
195
196
197 - 201
202
203
204
•
205 - 206
207 - 208
209 - 212
213 214
·
·
215
216
217 218
-
Shipbuilding
Shipbreaking and Steel Rolling Mills.
LAND FOR INDUSTRY
219 220
-
221
Kwun Tong
222
Tsuen Wan/Kwai Chung/Tsing Yi
223
Industrial Land Sales .
224
INDUSTRIAL CO-OPERATION
HEALTH AND SAFETY STANDARDS OF HONG
225
KONG PRODUCTS
General
Health Standards
(a) Lead in Paint (Toys)
(b) Code of Practice for the Production
of Liquid Filled Toys .
(c) Lice Egg Cells on Wigs
(d) Lead in Pewterware
226 - 227
228 - 231
232
233 - 234
235 - 236
•
Chapter
Safety Standards
Paragraphs
(a) Christmas Tree Decoration Lights. 237 - 239
(b) Electrical Light Fittings.
(c) Inflammability of Nightdresses
NON-FUNCTIONING
TRANSISTORS
RECEIVING SETS .
FAR EAST
240 - 241
242
IN
IN RADIO
243 244
-
245 - 247
248
249
250 - 254
•
255
256 - 262
263 - 265
266 - 267
•
268
269
ECONOMIC COMMISSION FOR ASIA AND THE
Asian Standards Organization
IMMIGRATION EQUIRIES.
TRADE COMPLAINTS
5. DUTIABLE COMMODITIES AND LICENSING DIVISION
TRADE LICENSING AND RESERVED COMMODITIES
BRANCH
Trade Licensing
Reserved Commodities
(a) Rice
(b) Frozen Meat
(c) Frozen Poultry
(d) Coal
·
(e) Firewood
*
DUTIABLE COMMODITIES BRANCH
Revenue from Excise Duties.
(a) Tobacco
(b) Hydrocarbon Oils
(c) Liquor
(d) Table Waters
Revenue from Licences .
6. PREVENTIVE SERVICE
GENERAL
•
Preventive Service Review
vi
270 - 273
274 - 275
·
276 - 278
•
279 - 280
281
+
282 283
-
284 - 288
289
Chapter
EXCISE DIVISION
Hydrocarbon Oils .
Adulterated Liquor
Illicit Distilling
PREVENTIVE OPERATIONS DIVISION
Searches
Narcotics
Bullion
Unmanifested Cargo
Marine
TRAINING AND ADMINISTRATION DIVISION
General Investigation Bureau .
Prosecution Section
•
Paragraphs
290
291
.
292
·
293 - 295
296 - 297
298
299
300 - 301
•
302
303 - 305
Training
306 - 317
Staff and Discipline
318 - 322
FOOD UNIT (ESSENTIAL SERVICES CORPS).
323 - 324
7. STATISTICS BRANCH
GENERAL
325 - 326
TRADE STATISTICS
Registration of Imports and Exports
Regulations
327 - 329
Cargo Manifests and Trade Declarations
330 - 333
Parcel Posts Statistics
334
Revenue and Cost.
335 - 336
Classification.
337
Services.
338
Computerization
339
CONSUMER PRICE INDICES
340 - 345
RETAIL PRICE INDEX.
346 - 347
vii
Chapter
Paragraphs
CONTINUOUS HOUSEHOLD EXPENDITURE SURVEYS 348 - 349
8.
INDUSTRIAL PRODUCTION STATISTICS .
RESEARCH
PUBLICATIONS
DATA PROCESSING
•
·
CONFERENCES
ADMINISTRATION AND ACCOUNTS BRANCHES
GENERAL
•
OVERSEAS OFFICES
·
350 - 353
354
•
355 - 358
牵
359 - 364
365
366
367
ORGANIZATION AND PERSONNEL
Departmental Organization
Senior Staff Movements.
Establishment
Recruitment
Training
•
OFFICE ACCOMMODATION
368 - 369
370 - 374
375 - 378
379 - 380
381 - 389
390 - 395
WELFARE
396
•
Departmental Quarters
397
Preventive Service Senior Staff Club
398
Clerical Canteen
399
FINANCE AND STORES
Revenue
400 - 401
Expenditure
•
Police Children's Education Fund.
Stores
Welfare Funds
viii
-
402 404
405
406 - 409
410
TABLES
Table
1.
2.
Exports of Restrained Cotton Textiles to Britain, 1964-1968.
Exports of Cotton Textiles Restrained under G.A.T.T. Cotton Textiles Arrangements from October, 1962 to September, 1968.
3. Certification of Origin Statistics.
4.
Trade Complaints from Overseas Companies or Individuals
Handled by the Department from 1.4.1967 to 31.3.1968.
5. Duty from Dutiable Commodities (Gross).
6.
Revenue from Dutiable Commodities Licences, 1967-68.
7. Major Confiscations under other Legislation 1967-1968.
8. Confiscations under the Dutiable Commodities Ordinance, Chapter 109, and Dangerous Drugs Ordinance, Chapter 134.
9.
10.
Commerce and Industry Department, Hong Kong, Organiza-
tion Chart.
Net Revenue Collected from all Sources.
ix
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CHAPTER 1
REVIEW OF THE YEAR 1967-68
(including a note on new departmental organization)
INTRODUCTION
THE Review of Overseas Trade in 1967 published in July 1968 recorded a very satisfactory increase in exports and a remarkable increase in imports given the shock to the economy from the backlash of the Cultural Revolution in China which characterized the period May to October. The revaluation of the Hong Kong dollar against sterling in November came too late to have any significant effect on trade or industry as expressed in the trade figures. Nevertheless the figures as a whole are eloquent proof of the inherent strength of the industrial and trading economy in the face of adversity.
2. The value of domestic exports reached a record level at $6,700 million or 17 per cent above 1966, with a recovery in exports to Australia, New Zealand and South Africa coincidental with continuing penetration of markets in the United States, Britain and Canada. At $8,167 million, imports of merchandise from all countries other than China increased by 11 per cent compared with a 10 per cent increase in the preceding year.
3. It is appropriate to segregate the value of trade with China from total trade figures, because the events of 1967 in China were reflected in a substantial decrease in imports from that source, the first reversal of an upward trend persistent over twenty years. The value of imports from China in 1967 fell by 18 per cent to $2,282 million.
4. My objective during this unusual year was to make certain that departmental effort was not deflected significantly from its primary task, the maintenance of the channels of external trade, but to re-orientate departmental effort in the domestic sector in a manner best suited to counteract the forces of subversion and to overcoming problems arising from the effect of the Cultural Revolution in China on trade and the livelihood of the people.
1
5. Despite this deflection of effort, the fiscal year ending March 1968 was characterized by three important achievements:
(a) Regrouping of the hitherto functionally-oriented commercial relations divisions, concerned with textiles on the one hand and international organizations on the other, into two geographically- oriented divisions so arranged as to dovetail the policy and its implementation.
(b) Not only co-ordination of origin certification policy between designated issuing authorities but the means to reach a common policy and practice on disciplinary aspects, together with legisla- tive recognition of the department as the sole and effective pro- secutional authority.
(c) Recognition of a greater unity of interest in food import and production policy between those departments concerned and importers and distributors of certain foodstuffs.
6. This introduction would be incomplete without mentioning the work of members of the Trade and Industry and Cotton Advisory Boards, who at my request met informally and frequently in June and July to discuss and advise upon matters connected with the disturbances not only within but outside their terms of reference. Through them I in turn channelled information of importance to the commercial and industrial community.
EXTERNAL COMMERCIAL POLICY
Britain and the European Economic Community
7. In the field of external commercial policy, the event with the greatest potential significance for Hong Kong in 1967 was Britain's second application to join the European Economic Community. Although Britain is not quite such an important market for Hong Kong as it was when Her Majesty's Government first applied to join the Community, it remains second in importance to the United States. The department had therefore devoted considerable resources to follow- ing and analysing developments in Europe, keeping the Trade and Industry and Cotton Advisory Boards informed. With the advice of both boards, it prepared the brief for the Hong Kong Delegation, led by the Financial Secretary, which went to London in October 1967 to secure recognition of Hong Kong's particular interests in Her Majesty's Government's negotiating position. As in the event this second applica-
2
tion by the British Government to join the Common Market was frustrated, it is impossible to say exactly how Hong Kong would have been affected. All that can be said is that at best Hong Kong would have had to compete on equal terms in the British market with similar Community products. In the event, it continues to retain its preferential position vis-a-vis the Common Market, but not the E.F.T.A. countries.
Negotiation of the Cotton Textile Arrangement, 1967-1970
8. A development of real significance for Hong Kong was the agree- ment reached in early 1967 to replace the G.A.T.T. 'Long Term Arrangement Regarding International Trade in Cotton Textiles', the five-year currency of which expired on 30th September 1967, by a three- year Cotton Textiles Arrangement in virtually identical terms. We supported the extension because, while Hong Kong's commercial policy remains one of free trade, our pragmatic official assessment, shared by the Cotton Advisory Board, was that no realistic alternative could be achieved in this sensitive sector at that time.
United States of America
9. What had promised to be a relatively uncomplicated round of cotton textile negotiations with the United States in the spring of 1967 turned out in fact to be a difficult exercise for both parties. It had been a condition of the five-year comprehensive bilateral agreement con- cluded in 1966 retrospective to 1st October 1965 that, once the G.A.T.T. Long Term Arrangement on cotton textiles was renewed, a second round of negotiations would be held with a view to improving upon the access rights which Hong Kong enjoyed in the U.S. cotton textile import market. What had previously seemed to be a somewhat academic problem, namely the difference in U.S. and Hong Kong practice in defining what constituted cotton textiles, became however a practical issue of immediate importance just prior to these negotiations. The detail is recorded in the body of this report, and I am happy merely to note here that despite the complexity of the issue, it was possible once again to reach a mutually acceptable conclusion in tight negotia- tion, with backing from technically well informed representatives of the Cotton Advisory Board.
Canada
10. Another complicated round of textile negotiations took place with the Canadian authorities in both Geneva and Ottawa during the
3
first half of 1967, again with participation by members of the Cotton Advisory Board. They resulted finally in a unilateral undertaking by Hong Kong to restrain exports of certain garments made from polyester/ cotton fabrics. This was the first time that Hong Kong restrained exports of man-made fibre garments, although not our first non-cotton textile restraint; it will be recalled that exports of woollen knitwear to Germany have been subject to export restraint since 1966.
Benelux
11. As a result of negotiations with the Benelux Governments in Hong Kong in July, Hong Kong undertook to continue export restraint on cotton shirts and, in addition, to restrain exports of cotton nightwear, handkerchiefs, bed-linen and household linen of terry cloth. The Under- taking was effective from 18th July 1967 to 30th September 1968, the aggregate vel for 12 months being equivalent to some 8.2 million square yards. The quantity involved was not large, but the negotiations were protracted because the issues at stake were more far-reaching than the volume of business might indicate.
G.A.T.T./U.N.C.T.A.D.
12. Hong Kong was represented within the British Delegation at two major international meetings in the field of trade, namely the 24th Plenary Session of the G.A.T.T. in Geneva in late 1967 and the second United Nations Conference on Trade and Development in new Delhi in early 1968. Neither session was as fruitful as most participants would have wished, the former being rather anti-climactic because it came at the end of the Kennedy Round of tariff negotiations which had been the focus of G.A.T.T. attention for four years; and the latter because it failed to produce results sufficient to satisfy the aspirations of the developing nations.
13. One multilateral achievement of the G.A.T.T. which seems firm, although there have subsequently been issues which have threatened to unravel the patiently knitted agreement on wide-ranging tariff reduc- tions, was the conclusion of the Kennedy Round. After a cliff-hanging finish, the outcome was agreement to bring an average reduction of between thirty and forty per cent in the industrial tariffs of the major developed countries by instalments over a period of four years. Although on the whole Hong Kong is more concerned with non-tariff than tariff barriers, we naturally welcome this positive achievement towards the liberalization of world trade.
4
E.C.A.F.E.
14. Hong Kong was represented in April at the twentieth anniver- sary Plenary Session of the E.C.A.F.E. in Tokyo. The delegation felt it could afford to take a somewhat hard pragmatic line. The more successful countries of East Asia tended to take a similar line.
CERTIFICATION OF ORIGIN
15. A convincing origin certification system remains an important protective device for those who buy the products of Hong Kong's in- dustry and for that industry itself in that it plays a significant role in ensuring uninterrupted access to our main export markets. For these reasons, it is essential that the system continues to be efficiently administered and every effort made by the department, in conjunction with the approved non-Government certificate issuing organizations, to maintain the present high standards of reliability.
16. Several major improvements in co-ordination introduced during the year included enactment of the revised Protection of Non-Govern- ment Certificates of Origin Ordinance, 1967 which brought the legisla- tion governing the issue of non-Government certificates into line with that applying to the issue of Government certificates. Under the new legislation the Commerce and Industry Department is responsible for investigations and prosecutions arising from offences connected with non-Government certificates.
17. The Chinese Manufacturers' Association of Hong Kong was approved by the Government in July as competent to issue Certificates of Origin under Article 11 of the International Convention for Simplifi- cation of Customs Formalities, 1923. The Association subsequently became a member of the Certification Co-ordination Committee, a non-statutory committee of certificate-issuing bodies chaired by the department which is responsible for standardization of origin criteria, procedures and documents.
18. The number of firms and factories registered with the depart- ment for certification purposes rose to approximately 7,600 in March 1968, an increase of 20% as compared with the number for 1967. To meet increased commitments in terms of factory inspections and in- vestigations, the technical establishment of the Industry Inspection Branch expanded from 84 to 99 officers. 415,068 standard, common- wealth preference, and commercial comprehensive certificates of origin
5
were issued by the department during the year, an increase of 0.9% over the previous year. The value of exports covered was $3,925 million, which represented 56.9% of Hong Kong's total export trade.
19. As a result of investigations into origin-certification offences fines amounting to $435,680 were imposed by the courts, and several persons were given prison sentences. The severity of the penalties re- flects the seriousness with which the courts now regard offences against legal requirements in respect of certification of origin.
20. Following protracted discussions with the United States Foreign Assets Control, a new comprehensive certificate of origin procedure for the export of jadeite and nephrite manufactures to the United States was introduced during the year. The trade in jade products with the United States came to a standstill in 1965 when the department stopped issue of certificates because of widespread misdeclaration of the origin of products. The new procedure is likely to restore trade to the value of some $10 million annually.
INDUSTRIAL DEVELOPMENT
21. The civil disturbances of 1967 had little appreciable effect on industry. In fact, production increased during the period May to December 1967, as export trade figures pointedly indicate, and there was less time lost in absenteeism or industrial disputes than in any comparable period in recent years. Some manufacturers explored the possibility of establishing branch premises in other Asian countries as a form of insurance against risk of further trouble in Hong Kong, but in fact there is evidence to suggest that there was no significant increase in the normal number of branch factories that Hong Kong manufac- turers have in recent years been establishing in other Asian manufac- turing centres.
Water Shortage
22. Matters of more immediate concern to industralists than the disturbances were the rise in the cost of living consequent on the inter- ruption of food supplies from China and the severe shortage of water which occurred in August and September. As soon as it became clear that water restrictions would have to be introduced, the Industrial Development Branch, in conjunction with the Water Authority, worked out detailed plans to minimise the effects on industry. As a result, many
6
industrial areas in the Colony were able to receive a 24-hour supply and even at the height of the water shortage, those industries which consumed large quantities of water received sufficient for their needs by means of a specially operated and timed 16-hour supply period.
23. A further complication arose as a result of the need to increase the salinity of water. Again in conjunction with the Water Authority it was possible to make arrangements for those factories which were unable to use saline water in their production processes, to continue to receive normal mains water. I take the opportunity of expressing appre- ciation of the efforts made by the Water Authority on behalf of industry during this period of restriction.
Investment in Industry
24. A rapidly expanding industry is the manufacture of human hair wigs and hair pieces, mainly for the United States. By the end of the year, exports were running at an annual rate of well over $200 million and the industry employed over 12,000 workers, who are among the highest paid industrial workers in Hong Kong. This industry has de- veloped in the last four years and appears to have considerable potential for further expansion.
25. Overseas investors continued to include Hong Kong among their list of possible sites for establishing factories and some decided to come here. They include a textile factory to be established by a subsidiary of a world famous British group of textile manufacturers, two factories in the electronics field making reed switches and integrated circuits, and another for the manufacture of flexible ducting. Several other potential investors were in an advanced stage of negotiation with domestic in- terestes to establish plants in Hong Kong.
Industrial Land
26. Sales of industrial land continued to be slack, only eight lots being sold for industrial purposes during the year. The disturbances, predictably, nipped in the bud the beginning of a revival of interest in industrial building, which had been dormant since 1965. Demand for rented industrial premises remained however reasonably buoyant. Health and Safety Standards
27. In November, the United Kingdom Toys (Safety) Regulations 1967 came into force. They require among other things, that all surface paint used on toys sold in Britain should meet certain prescribed safety
7
standards concerned with the lead content of the paint. The introduction of this legislation had no effect on Hong Kong manufacturers since the Industrial Development Branch had been working through the medium of the Government Office in London in close co-operation with the Con- sumer Protection Branch of the Home Office for some two years prior to its introduction. Manufacturers were advised of the impending change well in advance, which enabled them to adjust their production arrange- ments accordingly.
Productivity
28. The Hong Kong Productivity Centre made considerable progress during the year both with training its own staff and initiating a pro- gramme of instruction as comprehensive as its slender staff resources permitted. But enthusiasm and careful groundwork are beginning to bear fruit and the Centre has already begun to make its mark on in- dustry. The departmental representatives on the Executive Committee played a full part in implementing the broad directives of the Produc- tivity Council and in the management of the Centre. One Trade Officer, seconded for preliminary work since 1965, left the department at the end of his contract to join the Staff of the Centre.
PREVENTIVE SERVICE AND REVENUE
Dutiable Commodities Revenue
29. Revenue from dutiable commodities and licences came in com- paratively slowly during the first part of the year, to some extent affected by a reduction in spending by the public associated with nervousness arising from the disturbances. The overall estimate was therefore revised downwards in October from $329 million to $311 million. In the event this revised estimate proved unduly pessimistic and the final net outturn was over $320 million, an increase of 2% over the previous financial year. The only duty which yielded less than the previous year was that on liquor which was down 3.3%. This was partly because of a tem- porary disruption in supplies of beer and liquor from China.
Preventive Measures
30. There was evidence during the year that the operations of illicit distillers were even more widespread and sophisticated than had been thought. Also the illegal use of industrial diesel oil (which pays a lower
8
rate of duty) in road vehicles reached serious proportions. Despite some restriction of their activities during the disturbances, Preventive Service excise patrols discovered fermenting materials at the sites of illicit dis- tilling operations sufficient to produce 44,000 gallons of spirits; this represents a 90% increase over the previous year. Oil seizures amounted to a total of nearly 34,000 gallons despite the fact that this problem has to be handled by patrols whose main objective is illicit distilling. These operational successes were in part due to a more constructive approach to controls, but they likewise underline the fact that a very substantial loss of revenue can take place through evasion if not properly contained.
Narcotics
31. There is strong evidence to support the belief that narcotics are being smuggled into Hong Kong by means of ocean-going trawlers which either dump their cargoes at sea to be picked up by small local craft, or hand them over to such craft at night. The drugs are sub- sequently landed at isolated beaches. This does not mean that the smuggling of narcotics in ships using the harbour has ceased or that there can be any let up in Preventive Service ship and cargo search operations, but it does pose a very difficult problem because of the many isolated islands and beaches which can be used by the smugglers. The return of Preventive Service launches to service operational com- mand which should be completed by mid-1968, and crewing of the launches entirely by Preventive Service personnel should go some way towards meeting this problem.
32. The year was characterized by close co-operation with the Police Narcotics Bureau, and by working up of the research section of the Preventive (Operations) division. The function of this section is to narrow the field of vessel and cargo search, to attempt to check all vessels using the harbour would be wasteful of manpower even if it were feasible.
Review of the Preventive Service by the Governor
33. His Excellency the Governor reviewed 360 members of the Preventive Service at a parade held at the Police Training School at Aberdeen on 16th March 1968. This parade was unique in the history of the Service in that it was the first time a Governor had taken the salute. It was also unique in that for the first time the Commissioner, together with his deputy and assistant associated with the Service, wore
9
its uniform and newly designed badges of office. The drill and bearing of those on parade came in for favourable comment both from His Excellency and other distinguished guests.
Training
34. Mr. F. BISHOP, C.B.E., the distinguished specially-appointed Training Adviser to the Preventive Service, presented his second report on training in administration and management in July 1967, some months before the period of his contractual appointment expired. Many of the recommendations in his first report on training have either been implemented or are under consideration. The more controversial pro- posals in his second report are of great value in considering the longer- term development of the Service. As Commissioner of the Service, I am greatly indebted to Mr. BISHOP for the work he has done for the Service.
MISCELLANEOUS
Rice
35. The world shortage of rice was felt during the year most acutely in South East Asia. With export prices of Thai rice continually increas- ing and availability uncertain, coupled with interruption of supplies from China, importers began seeking other sources of supply. For the first time substantial quantities of rice from the U.S.A. appeared in the market and held their own both as regards price and consumer pre- ference with rice from traditional sources. It is thought that American exporters will endeavour to retain a share of the lucrative Hong Kong market.
36. The Rice Control Scheme, designed to ensure a regular supply of rice to the consumer at a reasonable price, with a reserve stock to meet emergencies, again survived a difficult year and proved its worth. Importers quickly built up stocks at the beginning of 1967 after the ban on Thai exports was lifted; this was fortunate as, when a run on rice stimulated by general public uneasiness and rumours of shortage took place in June, stocks stood at the very satisfactory level of 88,000 tons, and it was possible therefore to reassure the public with confidence that there was no question of short supply. The rush on rice shops did, however, place a strain on distribution channels and for a few days prior to the return of public confidence, prices went up to unprecedented levels. The introduction of a rapidly organized direct purchase scheme
10
which enabled large commercial and industrial concerns to buy from importers at the current wholesale price had a stabilizing effect, as did the setting up by certain department stores of temporary retail outlets at which the public could buy rice at reasonable prices. Prices quickly dropped to a more reasonable level, although, due to world market prices remaining very high throughout the year, domestic prices did not come down to their 1966 levels. Only in the first quarter of 1968, with forecasts of greater availability of rice, did prices show signs of coming down from the artificially high levels of 1967.
Consumer Price Index
37. During 1967, the Consumer Price Index underwent more severe fluctuations than at any time since it was initiated in 1965. In January 1967 it stood at 108. In June, shortage of food supplies from China was reflected in an upward movement which reached a peak of 121 in September, but despite the effect of the November revaluation of the Hong Kong dollar on many items of household expenditure, it had returned to 112 at the end of the year. The monthly average foodstuffs index for the whole year was 120, but in September it went as high as 140. The remarkably calm way in which people adjusted their diets to changing prices demonstrated their acceptance of the fact that there was no practicable short term alternative.
Industrial Production Statistics
38. The report of the Trade and Industry Advisory Board's Com- mittee on Industrial Production Statistics was submitted to the Colonial Secretary in March 1968, with a recommendation that it be taken into account when the newly-formed Census and Statistics Department was preparing its longer term programme.
Ad Valorem Charges on Trade Declarations
39. Ad valorem charges to a total of $9.7 million were collected on trade declarations during the financial year. Of this amount $1 million was notionally credited to the cost of preparing the trade statistics, and $6.7 million notionally appropriated in the subvention to the Trade Development Council in the Estimates approved for the 1968-69 financial year.
Export Promotion
40. During the year the Trade Development Council and the Export Credit Insurance Corporation, the two autonomous statutory organiza-
11
tions devoted to export promotion, made substantial progress, in which the department was able to assist them both formally through its representatives in their councils and informally through links established at the staff level.
41. Departmental staff temporarily seconded were gradually with- drawn, but the department, by arrangement, agreed to the permanent transfer of two Senior Trade Officers to hold positions of responsibility in each organization.
Senior Staff Changes
ADMINISTRATION
42. There were three major changes in the senior management of the department during the year. In December, Mr. D. H. JORDAN, M.B.E., Administrative Officer Staff Grade B2, was assigned as Deputy Director (Commercial Relations) in place of Mr. HADDON-CAVE, Administrative Officer Staff Grade C, transferred to the Colonial Secre- tariat two months previously to become Deputy Economic Secretary.
43. Mr. H. D. MILLER, Administrative Officer Staff Grade C, who had served as Assistant Director in charge of the Textiles Division since April 1965 went on leave in January 1968. He was replaced from the departmental establishment.
44. Mr. A. L. TOKLEY was promoted to Chief Preventive Officer in place of Mr. L. C. MILLINGTON, who retired in October after nearly seven years in that position. Mr. MILLINGTON was subsequently made a member of the Imperial Service Order in recognition of his devotion to duty during his 28 years with the Preventive Service and practical interest in social service.
Departmental Organization
45. Transfer to Statistics Branch. A major change affecting depart- mental organization occurred in November when its Statistics Branch became the Economic Statistics Division of the newly created Census and Statistics Department. This brought to an end departmental respon- sibility for publication and interpretation of trade statistics, but collec- tion of trade declarations and charges relating thereto remained with the department. This desirable evolutionary change was an interesting landmark in the history of the department, one of whose primary tasks since its inception has been to prepare and publish the trade statistics.
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The intimate association of the former Statistics Branch with the depart- ment will continue for some time yet, as it will remain physically in the headquarters building.
46. The Commercial Relations Divisions and Overseas Offices. Until September the two commercial policy divisions of the department were responsible respectively for (a) textile matters, both external and internal, including implementation of controls, and (b) for overseas trade relations other than in connection with textiles. In September the two divisions were reorganized on a geographical and regional basis to spread the work load and departmental expertise more evenly and to take account of the likely pattern of future developments. One division was made responsible for commercial relations with Europe and for internal implementation of any associated controls or connected activities; the other became responsible for similar matters in respect of the remainder of the world together with Hong Kong's relations with international organizations concerned with economic matters, such as G.A.T.T., U.N.C.T.A.D., and E.C.A.F.E. Through careful advance preparation, this difficult reallocation of responsibilities was put through without serious dislocation.
47. In addition to conducting Hong Kong's trade negotiations with other Governments, and implementing the agreements reached, these new divisions collect and disseminate information on trade policy measures by other countries which may affect Hong Kong and keep in touch with the activities of the international organizations.
48. The Department's four overseas offices-in London, Washington, Brussels and Geneva-work under the aegis of the two new Divisions, and are almost entirely concerned with commercial relations work, the first two in the countries which are our biggest markets, the third in the city where the E.E.C. has its headquarters, and the fourth with United Kingdom Mission to the G.A.T.T. and other international bodies in Geneva.
Establishment
49. At the beginning of the year the department's authorized esta- blishment stood at 1.526 posts, out of which 827 were in the Preventive Service. Vacancies in the civilian and Preventive Service establishments were 50 and 163 respectively. Thirteen additional civilian and 20 addi- tional Preventive Service posts were approved during the year. On 31st March there were 31 vacancies in the civilian establishment and 153 in the Preventive Service, approximately half of the latter being in the
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Marine Section. Recruitment during the year enabled the department to complete its establishment of 24 Assistant Trade Officers.
Office Accommodation
50. Accommodation in Fire Brigade Building continued to be cramped and inconvenient in some respects. In March, however, approval was given for the Public Works Department to undertake an investigation into the renovation of the building with a view to provid- ing a better standard of accommodation. With the transfer of the Preventive Service to new premises in the Rumsey Street Car Park building scheduled for late-1969 and the release of residential accom- modation by the Fire Brigade on the fifth floor about the end of 1968, there will be scope for possible expansion and for improving facilities.
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'. Apart from special weekly meetings held in June and July to consider matters connected with the disturbances, the Board met on ten occasions during the year and discussed a range of important sub- jects, the major ones being the Hong Kong approach to Britain's appli- cation to join the E.E.C., the second United Nations Conference on Trade and Development, Hong Kong's trade with China, South African anti-dumping duties and French import quotas. I should like to thank all members of the Board for the stimulating and effective advice they tendered and for their loyal support in a difficult year. My particular thanks are due to Mr. Q. W. LEE, J.P., Mr. K. S. Lo, J.P., and Mr. James M. H. Wu, J.P. for so ably leading Hong Kong delegations to three E.C.A.F.E. committee or council meetings. The composition of the Board remained unchanged at the end of the year and comprised the three gentlemen named above together with the Hon. P. Y. TANG, O.B.E., Mr. T. K. ANN, Mr. H. J. C. BROWNE, J.P., Mr. P. A. GRAHAM, J.P., Mr. M. A. R. HERRIES, O.B.E., M.C., J.P., and Mr. R. E. MOORE.
52. The function of the Cotton Advisory Board is to advise me on matters directly affecting the Colony's cotton textile industry and related matters. The Board consists of thirteen members, all unofficials, under ex-officio chairmanship of the Director of Commerce and Industry. Membership comprised Dr. the Hon. Sir Sik-nin CHAU, Kt., C.B.E., J.P., the Hon. S. S. GORDON, O.B.E., J.P., Mr. Y. L. YANG, J.P., Mr. T. K.
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ANN, Mr. CHEONG Ying-chan, Mr. C. K. CHOW, Mr. LAM Kun-shing, Mr. D. W. JONES, Mr. Francis Y. H. TIEN, J.P., Mr. William T. L. Yao, Mr. Y. C. WANG, Mr. David Z. D. Woo and Mr. M. CURRAN. At the end of the year, Messrs. CHEONG Ying-chan and D. W. JONES stood down and were replaced by Messrs. J. A. KING and Wog Ping.
53. The Board is particularly concerned with advice on the conduct of negotiations and the implementation of international agreements. It met twenty times during the course of the year. In addition a number of members accompanied official delegations overseas on several occasions.
54. My predecessor and I have been keenly aware of the value of these two Board 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.
Acknowledgements
55. I take this opportunity of recording the department's continuing and fruitful association with the Hong Kong General Chamber of Commerce, the Federation of Hong Kong Industries, the Chinese Manufacturers' Association of Hong Kong, and the several associations connected with the textile industry. The department works particularly closely with the Federation which provides services of increasing value to industry. Once again my staff assisted the Manufacturers' Associa- tion with the arrangements for its annual exhibition which, despite the somewhat difficult circumstances in which it was staged in 1967, included a number of novel features.
56. I also acknowledge with thanks assistance from the permanent missions of overseas countries stationed in Hong Kong, who on a num- ber of occasions have smoothed the conduct of consulations or negotia- tions and made valuable contributions on many less important matters to the work of the department.
57. What we have achieved this year is the result of hard work and willing co-operation by the staff of the civilian branches of the depart- ment and of the uniformed Preventive Service, often in circumstance of considerable strain, I am deeply grateful. A more detailed record of their work is contained in the succeeding chapters of this report and its appendices.
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CHAPTER 2
COMMERCIAL RELATIONS 'E' DIVISION (EUROPE)
58. As reported in paragraphs 46-47, the Divisions of the Depart- ment dealing with Hong Kong's external commercial relations were reorganized on a geographical rather than a topic or product basis in September 1967. The Overseas Trade Relations and Textiles Divisions were thus superseded by two Commercial Relations Divisions, one responsible for Europe and the other for the rest of the world.
59. During the year, the Division issued country pamphlets on Austria, Denmark, Italy, Belgium and Luxembourg, Spain, Sweden, Norway, the Netherlands, Ireland, Switzerland, Portugal and the United Kingdom.
60. The Division has overall responsibility for the procedural and legal aspects of the licensing of textiles exports and, during the period under review, plans were made, in collaboration with the Organizational Surveys Unit, for the computerisation of licensing records. The change- over to full electronic data processing should be effected by the begin- ning of 1969. Progress has also been made on the revision of the legislation covering licensing requirements and on proposals for quota regulations under the Importation and Exportation Ordinance.
INDIVIDUAL COUNTRIES
Austria
61. The anti-dumping legislation affecting Austrian imports of woollen knitted outerwear from Hong Kong and other suppliers was extended in a revised form with effect from 1st July. While exports of woollen knitted outerwear to Austria declined during the year, it was difficult to say whether this was due to the new legislation or to a change in fashion from woollen to acrylic knitwear. The British Embassy in Vienna was asked to obtain information regarding partic- ular instances of the application of the anti-dumping measures; in the light of the evidence produced, the Department will consider further approaches to the Austrian Government on this issue.
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The Benelux Countries
(a) Cotton Textiles
62. In May, the Benelux Governments expressed concern at the level of imports of certain cotton woven textiles from Hong Kong and re- quested consultations, under the provisions of the Long Term Arrange- ment, with a view to the conclusion of a restraint agreement. As a result of consultations in Hong Kong in July, the Hong Kong Govern- ment undertook to continue restraint on exports of shirts, and to restrain exports of nightwear, handkerchiefs, bed linen and household linen of terry cloth. The undertaking related to two distinct periods; from 18th July to 30th September 1967, and from 1st October 1967 to 30th September 1968. The aggregate limit for the second period was equivalent to some 8.2 million square yards (see also Table 1). Quota allocations for 1967-68, based on shipment performance during the preceding twelve months, were made in October, and by the end of March 1968 approximately 40% of the limit for the second restraint period had been licensed for shipment.
(b) Umbrellas
63. On the occasion of the consultations on textiles referred to in paragraph 24, the Benelux delegation intimated that they also wished to hold consultations on imports of Hong Kong umbrellas. The consulta- tions subsequently took place on 11th and 14th July. Both sides agreed that further study was necessary of what had proved to be a difficult issue. The Hong Kong side undertook to investigate the origin and composition of the trade. Since October 1967, the Benelux Governments have required all umbrella imports from Hong Kong to be covered by certificates of origin.
United Kingdom
(a) Britain and the European Economic Community
64. In May, the British Government again applied for membership in the European Economic Community. As the result of a successful application could have far reaching effects on Hong Kong's external trade, the Department followed developments closely and consulted the Trade and Industry and the Cotton Advisory Boards on a number of occasions. In July and again in October, officers of the Department went to London for discussions with British officials on the various implica- tions for Hong Kong of Britain's application to join the E.E.C. and to
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acquaint Her Majesty's Government with Hong Kong's views. Although, on 19th December 1967, the Community's Council of Ministers decided not to open negotiations with Britain, member states, other than France, have since restated their desire that Britain should become a member of the Community, and have put forward various plans to the Commission suggesting closer economic and technological co-operation with Britain. The Department is continuing to keep the situation under review. (b) Cotton Textiles
65. Under the 1966-1970 arrangements, Hong Kong had a 1967 aggregate restraint limit of 186.85 million square yards for cotton woven piecegoods and made-ups and garments, 6.363 million lbs. for cotton yarns, and a further 2.388 million square yards for miscellaneous cotton manufactures not restricted under the 1963-1965 undertaking.
66. As illustrated in Table 1, 1967 export performance in all groups was maintained at a high level, and neither the closure of the Suez Canal nor the devaluation of sterling appeared to have any marked effect on the rate of shipment. At the year end, there remained small unshipped balances of quota in the cotton yarns and miscellaneous manufactures groups, but the piecegoods and made-ups and garments allocations were fully utilized. Use was also made of the anticipation provision in the agreement and, by 31st December 1967, 3.24 million square yards of the 1968 quota had been shipped.
67. In 1967 and the first quarter of 1968, the High Hong Kong Cost Content Schemes for finished piecegoods and made-ups and garments were operated as previously. Keen competition for the yardage available under the Schemes reflected a strong demand in the British market.
68. The internal quota control arrangements for 1968, virtually the same as those in operation in 1967, were announced in December and final allocations of quota were made in February 1968.
Federal Republic of Germany
(a) Cotton Woven Textiles
69. As can be seen from Table 2, utilization of the quota of 77 million square yards for the first restraint period, covering 14 months from 1st November 1966, exceeded 90% despite the rather soft market conditions prevailing in Germany during the period. The introduction of a quota surrender (without penalty) scheme in September no doubt assisted in the achievement of this satisfactory performance.
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70. The effective restraint level (including carryover in the fabrics, outerwear and towels groups) for the second restraint period, the calendar year 1966, is 68.6 million square yards, and figures at the 31st March 1968 indicate about 25% of the quota was licensed for shipment during the first quarter of the year.
71. On the advice of the Cotton Advisory Board, it was decided that 1968 quota should be allocated on the basis of companies' ship- ment performance against both quota and registered contracts in the first restraint period. Final allocations were made in January 1968. (b) Woollen Knitted Outerwear
72. During the first year of the revised restraint agreement, only 285,483 dozens, or 34.6% of the limit of 825,000 dozens, were shipped. These figures clearly reflect the weak state of the German market for Hong Kong woollen knitwear in 1967.
73. On the advice of the Wool Committee of the Trade and Industry Advisory Board, the Department instituted a dual control system for 1968; some company quota was allocated on the basis of past per- formance, while the remaining quantity was made available on a first- come-first-served basis by means of an export authorization scheme. The effective restraint limit for 1968 is 899,750 dozens, including carryover of 24,750 dozens.
France
(a) Cotton Textiles
74. France maintains residual import restrictions on a number of cotton textiles items from Hong Kong under Article 2 of the Cotton Textiles Arrangement; the products involved are loomstate and finished fabrics, various made-up articles and both knitted and woven apparel. On the advice of the Cotton Advisory Board, officers from the Depart- ment visited Paris in October 1967 to discuss cotton import quota levels for the period 1st October 1967 to 30th September 1968, and to seek changes in the French import licensing system to enable greater utiliza- tion of the quotas to Hong Kong's benefit. The French Government decided to split the quota, amounting to 375 metric tons, into two equal parts, one part to be administered from Hong Kong by means of a pro forma invoice endorsement scheme, and the other to be administered by the French Government as in the past. A review is to be conducted to ascertain whether the revised arrangements have improved the utiliza- tion of the import quotas.
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(b) Other Import Restrictions
75. On the advice of the Trade and Industry Advisory Board, the Deputy Director (Commercial Relations) and the Assistant Director (Brussels Office) visited Paris in January for talks with the French Government on import restrictions on Hong Kong goods other than cotton textiles. The French Government agreed to liberalizse woven silk fabric, women's under-garments, imitation jewellery and still cameras, and to increase quotas on the nineteen items still subject to control by a total of N.F. 1.01 million.
Norway
76. Following negotiations in Oslo in May 1967, agreement was reached between the Governments of Hong Kong and Norway on the extension of the restraint on the export of Hong Kong cotton woven nightwear to Norway. Under the new agreement, Hong Kong under- took to limit exports of cotton woven nightwear for men, women and children to the following quantities for the periods stated----
1.10.67 - 30.9.68 1.10.68 - 30.9.69
24,000 dozens
25,000 dozens
1.10.69 - 30.9.70
26,000 dozens
77. The Norwegian Government, while no longer stipulating a limi- tation on exports of Hong Kong cotton woven casual shirts to Norway, reserved the right to request the re-imposition of the restraint should imports of these shirts increase in such a way as to cause or threaten disruption in the Norwegian market. As the restraint agreement in respect of shirts terminated on 30th September 1967, export licences for this item were freely issued again from the beginning of October.
78. On the advice of the Cotton Advisory Board, nightwear quota for 1967-68 was allocated to companies on the basis of shipment per- formance against their allocations during the previous restraint period. Final allocations were made towards the end of October 1967.
Republic of Ireland
79. The Irish Government maintains quota restrictions on imports of certain textile items from Hong Kong, Japan, Malaysia, Pakistan and some East European countries. A protest was made to the Irish authori- ties in August 1967 against the discriminatory nature of the restrictions and the way they were being administered. The Irish Government re-
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plied in October that the quota restrictions had been introduced to safe- guard the interests of Irish manufacturers. On the advice of the Trade and Industry Advisory Board, a further aide memoire was submitted to the Irish Government by H.M. Government pointing out that the restric- tions were inconsistent with Ireland's obligations under the G.A.T.T. and in any event would not appear to be necessary since the quotas were never fully utilized by Irish importers. This submission, made in February 1968, has as yet elicited no response.
General
OVERSEAS OFFICES (EUROPE, EXCLUDING GENEVA)
LONDON OFFICE
80. The year was an unusually eventful one. It saw the long drawn out confrontation in Hong Kong, the Middle East war and the closure of the Suez Canal, the British dock strikes, the shelving of Britain's application to join the Common Market, the devaluation of sterling, the gold crisis and the series of measures of increasing severity taken to remedy Britain's economic ills. All brought problems with them affect- ing Hong Kong's relations with Britain and in consequence the London Office was throughout the year in close contact with the Commonwealth Office on a wide variety of matters both economic and general. Public relations work, too, increased in volume and importance and a con- certed drive had to be made by all the Hong Kong agencies concerned to ensure that events in Hong Kong were seen in perspective and busi- ness confidence maintained.
81. Friendly contact was also maintained with the Board of Trade, the Home Office and with H.M. Customs.
82. Towards the end of the year an Assistant Trade Officer was attached to the Office to ascertain in detail how the Board of Trade import licensing system worked and to make recommendations to the Commerce and Industry Department's Textiles Licensing Office in the light of the knowledge gained.
83. By the end of June the Office had finally settled down in its re-arranged accommodation with the Trade Development Council's London Office occupying the display centre and offices at 55/58, Pall Mall and the Information Section settled in newly built offices on the ground floor of 54, Pall Mall.
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84. Throughout the year the Office continued to serve as a useful central London base for visitors from Hong Kong.
Trade Relations
85. During the year the Director of the London Office attended a number of meetings concerned with international trading matters affect- ing Hong Kong. In July he was a member of the Hong Kong delegation led by Mr. C. P. HADDON-CAVE to discuss with the Commonwealth Office and other British Government Departments the effects which Britain's renewed application to join the Common Market might have on Hong Kong trade. In October he was a member of a further delega- tion led by the Hon. J. J. CoWPERTHWAITE, C.M.G., O.B.E., to continue these discussions. At the end of the year he took part in formal meetings between the Heung Yee Kuk Delegation and both the Secretary of State and the Minister of State at the Commonwealth Office.
86. The Director also attended the regular monthly meetings of the Hong Kong Association.
87. The continued weakness of the British economy leading on 18th November, 1967 to the devaluation of the pound and Hong Kong dollar and the subsequent revaluation of the Hong Kong dollar brought with it a spate of problems for Hong Kong manufacturers and exporters and British importers. The Office did its best to assist in the solution of these problems in conjunction with the Hong Kong Trade Development Council.
Public Relations and Liaison with Trade Development Council
88. The public relations work arising out of the political disturb- ances in Hong Kong dominated the activities of the Information Section of the Hong Kong Government Office in London throughout the remainder of the year.
89. From information supplied by the Government Information Services in Hong Kong, daily (later, twice weekly) situation reports were circulated to business houses, political organizations and individuals with interests in Hong Kong.
90. At the height of the disturbances, regular and close contact was maintained with the British Press. A press conference arranged at the London Office for H.E. the Governor during his visit to London in September, 1967, was attended by some 30 leading Commonwealth and Diplomatic Correspondents.
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91. Immediate dissemination of information was made possible by the fact that the Section had at the beginning of the year become a subscriber to Universal News Services-a private teleprinter network to the majority of British newspapers, broadcasting services and foreign news agencies.
92. Throughout the confrontation period, the Section supplied G.I.S. with daily summaries by cable of the news and comment appearing in British newspapers and on radio and television (the latter through a subscription to a monitoring service).
93. As the disturbances subsided, the emphasis of the Section's public relations work was shifted to the maintenance of commercial confidence in Hong Kong. The Principal Information Officer visited Hong Kong in September for talks with the Information Services Department, the Commerce and Industry Department and the Trade Development Council. On his return to London, he became responsible for setting up and operating a public relations programme jointly with the London Office of the Trade Development Council, aimed specifically at maintaining confidence among British business firms in Hong Kong's continuing economic viability.
94. A further result of the collaboration between the Information Section of the Government Office and the Trade Development Council was the production of a bi-monthly-printed 'Newsletter'. Copies were sent to every Member of Parliament, to Chambers of Commerce and banks, as well as to addressees on the regular mailing list.
95. The Information Section was responsible for the public relations arrangements, including a number of cinema shows and press con- ferences, in connection with the 'goodwill mission' to the Hong Kong Chinese community in Britain of a four-man delegation from the Heung Yee Kuk, at the beginning of 1968.
96. It was also responsible for distribution in the U.K. of the 'Hong Kong News Digest', a Chinese-language weekly newspaper produced by G.I.S. to keep overseas Hong Kong Chinese in touch with events in Hong Kong. By the end of the year, circulation of the newspaper in Britain had reached 10,000. About three-quarters of this number were mailed directly to individual Chinese readers, with the assistance of a commercial mailing organization and a Chinese firm trading as agents for the servicing of subscriptions to Hong Kong Chinese newspapers.
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The remainder were distributed by the Section to all British-based shipping companies employing Chinese crews, Chinese clubs, congrega- tions, emporia, students' organizations, etc.
97. In October, 1967, a Public Relations Liaison Committee was set up, under the chairmanship of the Director of the London Office, to exchange information between the various organizations in Britain concerned with projecting a favourable image of Hong Kong.
98. For several months, the Section was preoccupied almost exclu- sively with at first setting up machinery for, and then building up, a steady flow of information arising from the 'confrontation' in Hong Kong. Nevertheless, every effort was made to maintain the other public relations services which are the normal activities of the Section.
99. A steady flow of 'routine' press releases was maintained through- out the year, mainly through the facilities of Universal News Services. Several hundred items of news were transmitted through U.N.S. and nearly a hundred other releases were distributed by post, mainly to the trade and technical Press.
100. Over 200 items concerning Hong Kong were distributed on the Parliamentary Information Service. This rapid service of extracts from the House of Commons and House of Lords Hansards was sent to a number of important business houses in Britain and was given a further wide distribution in Hong Kong by G.I.S.
101. A considerable part of the Principal Information Officer's time was again devoted to dealing with complaints about the health or safety standards of Hong Kong products. Through these activities, potentially adverse publicity was sometimes prevented, and when publicity could not be avoided appropriate counter measures were taken. Cordial rela- tions were maintained with the Consumer Protection Branch of the Home Office, the Consumer Council, the Consumers' Association (pub- lishers of 'Which?'), the Royal Society for the Prevention of Accidents, the British Standards Institution, and local consumer groups. The Prin- cipal Information Officer addressed a public meeting in Bournemouth on the subject of toy safety.
Hong Kong House
102. The Office continued to assist the Board of Governors and the House Warden in the administration of Hong Kong House. Considerable time was devoted to the usual questions concerning estimates of income
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and expenditure and the many administrative problems which arose during the year. Two meetings of the Board of Governors and two meetings of the Executive Committee were held during the year. At the end of the year the Director was a member of a Working Party repre- senting both the Board and the Students' Committee appointed to make recommendations regarding the constitution and rules of Hong Kong House. The Working Party met three times during March. 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.
BRUSSELS OFFICE
Staff and Accommodation
103. During its second full year of operation the Brussels Office continued to be accommodated in premises leased in the same building as the British Embassy, Brussels; Britannia House, 30 rue Joseph II.
104. Experience during the year indicated that economies could probably be effected in both staff and accommodation without unduly reducing the general efficiency of the office. Thus towards the end of the financial year, when Mr. P. V. DODGE succeeded Mr. J. H. MARTIN as Assistant Director in charge of the Brussels Office, the Department decided to reduce the staff to an Assistant Director, one secretary and one clerk, and to renegotiate the office lease from the date when the office space no longer required for the reduced staff would become superfluous.
105. The Deputy Director (Commercial Relations) took the oppor- tunity of trade discussions with the French Government in Paris in January 1968 to visit the Brussels Office, and arrangements were made on that occasion for him to meet the Ambassador, Sir Roderick BARCLAY, and the Ambassador for the U.K. Delegation to the E.E.C., Sir James MARJORIBANKS.
Trade Discussions
106. The Assistant Director visited Hong Kong in July 1967 to attend the textiles consultations with the Benelux Government.
107. The Assistant Director attended, in addition, a number of trade negotiations, discussions and consultations with the Governments of the
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Member States of the Common Market, notably with the French Government in October 1967 on the subject of cotton textile quotas on imports from Hong Kong, and in January 1968 on the subject of other French trade restrictions; with German Government officials in January 1968 concerning residual matters for resolution stemming from Hong Kong's agreement with the Germans on the restricted export of certain cotton textile products; and with Benelux Government officials in February and March 1968.
Commercial Relations
108. The Assistant Director also visited Rome, Paris, The Hague, London, Bonn, Geneva and Luxembourg during the year to meet officials of the British Government and the national Governments, members of trade organizations, and businessmen trading with Hong Kong. Useful discussions were held on various commercial and economic matters during these visits. The Trade Officer made visits to The Hague, Paris, Bonn, Oslo, and Amsterdam to hold discussions on a number of specific trading matters.
109. The Brussels Office continued to fulfil its principal functions of observing closely economic and political developments within the European Common Market, and of making and maintaining contact with Community officials and the representatives of the various Member States and other national governments in Brussels, reporting such developments regularly to the Department.
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CHAPTER 3
COMMERCIAL RELATIONS 'R' DIVISION-REST OF WORLD (OUTSIDE EUROPE)
110. The Commercial Relations 'R' Division, established in Septem- ber 1967 includes responsibility for all countries outside Europe, and also for International Trade Organizations and the Department's Geneva and Washington Offices. During the year it issued 7 country pamphlets on Iran, Jamaica, New Zealand, South Africa, Uganda, Kuwait, Saudi Arabia; the text of a further seven, on Brazil, Ghana, Liberia, Libya, Peru, Zambia, Japan were completed and forwarded to the relevant British posts abroad for their comments. These pamphlets are designed to assist Hong Kong businessmen interested in trade with the territories concerned by providing general, political and commercial information with particular reference to the country's trading arrangements with Hong Kong. The pamphlets are available free of charge to commercial and industrial associations in the Colony.
INTERNATIONAL TRADE ORGANIZATIONS
General Agreement on Tariffs and Trade (G.A.T.T.)
(a) Cotton Textiles Arrangement
111. The year opened with a meeting of the G.A.T.T. Cotton Textiles Committee to conclude the long negotiations on the extension of the five year Long Term Arrangement and to draw up a protocol to that end. The protocol was opened for acceptance as from 1st May 1967 and by the end of September all countries participating in the Arrangement had indicated their acceptance. The arrangement, renamed the Cotton Textiles Arrangement, was therefore extended for a further three years until 30th September 1971. Hong Kong was represented at the April meeting of the Cotton Textiles Committee by Mr. C. P. HADDON-CAVE, then Deputy Director Commercial Relations, Mr. D. J. C. JONES, the Assistant Director, Geneva Office, Mr. H. D. MILLER, then Assistant Director (Textiles) and Mr. R. M. K. YAU, Assistant Trade Officer.
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112. A schedule of restraint limits and export performance under the new Arrangement and the Long Term Arrangement which preceded it are at Table 2.
(b) Kennedy Round
113. In the spring and early summer the major activity in Geneva was the conclusion of the 6th Round of G.A.T.T. Trade Negotiations (Kennedy Round). This was the most ambitious negotiation the G.A.T.T. had yet attempted and resulted in an average reduction of 30-40% in the industrial tariffs of the major developed countries (to be applied in five instalments over four years), as well as certain other arrangements. The Assistant Director, Geneva Office followed the pro- ceedings closely, in consultation with the British delegation, and he reported regularly on developments. He also negotiated with the United States delegation on certain requests made by the United States for concessions by Hong Kong in the light of possible benefits for Hong Kong in the offers being made by the United States.
(c) Other Work of the G.A.T.T.
114. After the Kennedy Round the activities of the G.A.T.T. were mainly directed towards preparation for the 24th Session of the Con- tracting Parties which was held from 9th - 24th November, 1967. There were meetings of the Committee on Trade and Development (the Com- mittee dealing with the trade problems of developing countries) in July and October, and a report was drawn up for consideration at the 24th Session. An ad hoc Group also met to assess the results of the Kennedy Round as it affected developing countries.
115. The 24th Session itself was preceeded by a meeting of the G.A.T.T. Council and by a special meeting of senior officials; and it ended with a three day meeting attended by Ministers. The Session was the first to be held after the end of the Kennedy Round which had occupied the centre of the G.A.T.T. stage for over four years. It also coincided with the twentieth anniversary of the founding of the Organization and was the last Session to be attended by Mr. Eric WYNDHAM-WHITE, Director General for the whole of that period, who had announced his intention to retire. It was therefore an occasion for a certain stocktaking of the G.A.T.T.'s achievements over the past two decades and for the drawing up of a new programme of work.
116. However, after such great efforts had been made in the Kennedy Round, it was perhaps too early to establish any very
28
ambitious or novel programme of work. In the field of tariffs it was recognized that a certain breathing space was necessary to digest the results of the Kennedy Round and that the scope for further tariff reductions in the near future was consequently limited. The questions which did present possibilities-non-tariff barriers, agriculture, the trade of developing countries were by no means easy to tackle. However, the 24th Session did set in hand new studies in all these fields and it agreed to the establishment of two new committees, namely a Committee on Trade in Industrial Products and an Agriculture Committee.
117. Following the 24th Session, the G.A.T.T. Council of Permanent Representatives met on a number of occasions during the period December--March to set in train the conduct of the new work pro- gramme and to consider certain other urgent questions. This included a wide ranging exchange of views at a meeting in March on the balance of payments difficulties of the United States and possible trade policy measures that might be taken to help deal with the situation. The Council also established a number of Working Parties to consider and report on certain problems arising in the G.A.T.T. framework. These covered a wide spectrum, ranging through international trade in dairy products and poultry, the rules governing the rebate and charging of taxation on exports and imports, the agreement to exchange preferences between India, the United Arab Republic and Yugoslavia, and the con- sultations with Poland on the working of the arrangements under which she acceded to the G.A.T.T. The Council also established a programme for the 1968 consultations with countries maintaining import restric- tions for balance of payments reasons.
118. During the year, an Assistant Trade Officer attended a four and a half month in-service training course in Geneva on commercial policy run by the G.A.T.T. Secretariat, in collaboration with the United Nations Technical Assistance Bureau. He was the fourth officer to be sent by the Department on this course.
United Nations Conference on Trade and Development (U.N.C.T.A.D.)
119. The year in question was also an important one for U.N.C.T.A.D., culminating in the Second Conference held in New Delhi from 1st February - 29th March 1968. In the summer and autumn of 1967 intensive work was conducted in the permanent organs of the U.N.C.T.A.D. in Geneva to prepare for the Conference. The Committee on Commodities met in June. Of more importance to Hong Kong was
29
the meeting in July of the Committee on Manufactures and its asso- ciated Group on Preferences. The reports of these bodies and of other Committees which had met earlier in the year were presented to the Fifth Session of the Trade and Development Board which was held from 15th August - 9th September 1967. The Board devoted most of this meeting to drawing up an agenda and making other preparations for the New Delhi Conference.
120. U.N.C.T.A.D. II involved a massive confrontation on a broad front between the developing countries on the one hand and the de- veloped countries, both of the West and the East, on the other. For various reasons it only had limited success. Decisions were taken, how- ever, which should lead inter alia to the intensification of negotiations on individual commodity arrangements, to an increase in the volume and improvement in the terms of aid to developing countries, and to the continuation of work on the drawing up of a generalized non- discriminatory system of preferences in developed countries for the exports of developing countries. These and other questions will be pursued further in the continuing institutions of U.N.C.T.A.D. in the period to come.
121. The Assistant Director in charge of the Department's Geneva Office attended all the above meetings, both in Geneva and New Delhi, as a member of the British delegation and he reported regularly to the Department on developments. He paid particular attention to the question of preferences which is of considerable potential importance for Hong Kong. In this connection he also followed the development of work in the Organization for Economic Co-operation and Development (O.E.C.D.) on preference and other questions concerning U.N.C.T.A.D. This Organization, whose membership comprises the developed coun- tries of Western Europe, North America and Japan has, as one of its tasks, the co-ordination of the views of these countries in U.N.C.T.A.D.
United Nations Economic Commission for Asia and the Far East
(E.C.A.F.E.)
122. Mr. Q. W. LEE, J.P., member of the Trade and Industry Advisory Board, headed the Hong Kong delegation to the Eleventh Session of the E.C.A.F.E. Committee on Trade, held in Bangkok from 18th to 26th January 1968. He was accompanied by two officers of the Department as alternate delegate and as secretary.
30
123. The Session was largely uneventful, being somewhat over- shadowed by the Second Session of U.N.C.T.A.D. due to follow imme- diately after.
International Cotton Advisory Committee (I.C.A.C.)
124. A delegation from Hong Kong led by Mr. David Z. D. Woo, member of the Cotton Advisory Board, attended the 26th Plenary Session of the I.C.A.C. which was held in Amsterdam from 11th to 21st June 1967. An officer from the Department's Brussels Office accompanied him.
Algeria
INDIVIDUAL COUNTRIES
125. A note was lodged with the Algerian Government in April 1967, protesting against the imposition of 'general tariff' rates to imports from Hong Kong and requesting the restoration of 'most- favoured-nation' rates in accordance with Hong Kong's rights under the G.A.T.T. Disruption of diplomatic relations between Britain and Algeria, however, retarded progress in this regard.
Australia
126. In October 1967, the Australian Government imposed dumping duties on imports from several sources, including Hong Kong, of certain knitted garments (mainly cotton knitted shirts) following an inquiry by the Tariff Board. With retrospective effect from 18th April 1966, imports of such garments cleared for home consumption were subjected to dumping duties equivalent to the amounts by which the export f.o.b. prices were lower than 'normal values'. The 'normal values' previously established provisionally by the Australian Department of Customs and Excise for imports of these garments from Hong Kong were sub- stantially lowered as a result of a recommendation made by the Tariff Board to whom representations had been made on Hong Kong's behalf.
127. Following an Australian Customs officer's investigation in Hong Kong, imports of cotton sheeting suitable for use as bed sheeting, pillow cases or bolster cases from Hong Kong into Australia on or after 28th August 1967 were made subject to the collection of dumping cash securities equivalent to the amount by which the export f.o.b. prices are lower than the 'normal values' established by the Australian Department of Customs and Excise.
31
128. In December 1967, the Australian Government invoked Article XIX of the G.A.T.T. and imposed temporary restrictions on imports of knitted coats, jumpers, cardigans, sweaters and similar garments from all sources. For the year ending 30th June 1968 imports are restricted to 100% of the value of imports in the year ended 30th June 1967. This action was taken pending a Tariff Board enquiry.
129. In late 1967, the Australian Government announced an exten- sion of its tariff preference scheme for imports of certain items from less developed countries including Hong Kong. In early 1968, a further list of items was added; but Hong Kong was excluded from six of them on the grounds that our exports were already highly competitive.
130. In January 1968, the Australian Government made its first restraint request under either the Cotton Textiles Arrangement or the Long Term Arrangement which preceded it. Under it, Hong Kong was asked to restrain exports of certain constructions of drills, denims, jeans and dungarees. Consultations were scheduled to be held in Hong Kong at the beginning of May 1968.
Canada
131. Following consultations in Ottawa, Hong Kong gave a un- ilateral undertaking, which the Canadian Government noted, to restrain exports to Canada of shirts, blouses and slacks made from polyester/ cotton blended fabrics, containing 50% or more polyester, for a twelve- month period ending 30th September 1968.
132. An agreement was reached with the Canadian Government to extend export restraint on four categories of cotton apparel (woven shirts, woven blouses, nightwear and slacks) for a further year from 1st October 1967 at the same overall limits as for 1966-67, with some increase in the sub-limit for adults' slacks and shirts. Knitted shirts, previously restrained, were liberalized under the new agreement. Cotton fabrics continued to be restrained in accordance with the three-year agreement extending to 30th September 1969.
133. A request for restraint of exports of cotton towels to Canada was received on 29th February 1968. This request was made by the Canadian Government under the provisions of Article 3 of the Cotton Textile Arrangement. Pending consultations, which were delayed due to difficulties facing the Canadian authorities, an agreement was reached
32
on an interim measure whereby exports of these goods to Canada were to be put under an export authorization control from 1st May.
134. A generally soft import market for cotton textiles prevailed in Canada during the textile year ending 30th September 1967 and in consequence there was a shortfall of 5.9 million equivalent square yards,
or 22.5%, of the combined limit for all restrained cotton textiles. Shipments of cotton apparel under restraint to Canada during the first half of the following textile year, up to 31st March 1968, showed some improvement, and amounted to 55.6% of the restraint limit compared to 37.2% during the corresponding period of the previous year. This improvement was, however, mainly in the garments sector; exports of cotton fabrics under restraint declined, amounting to only 15.6% of the restraint limit compared to 28.7% during the corresponding period in 1966-67.
New Zealand
135. The Government of New Zealand announced, for balance of payments reasons, a new import licensing schedule for the financial year 1967-68, the allocation of which represented in general a cut-back of about 20% on 1966-67 imports in the items which are of interest to Hong Kong.
Nigeria
136. The specific import licensing restrictions imposed by the Nigerian Government towards the end of 1965 on all imports from Hong Kong continued in force during the period under review. In January, 1968, however, they transferred a wide range of goods from open general to specific licensing when imported from any source, thus reducing to a degree the element of discrimination against Hong Kong, albeit without improving trade prospects. Domestic exports to Nigeria in 1967 were valued at $33.78 mn. compared with $19.48 mn. in 1966.
South Africa
137. For a number of years the South African authorities have levied anti-dumping duties on certain imports from Hong Kong based on arbitrarily established current domestic values. Following exchanges of diplomatic notes over a period of three years, a meeting was held during March 1968 with South African officials in Capetown. As a result the South African Government agreed, in principle, to send a
33
team of customs officials to Hong Kong to review their assessment of current domestic values for duty purposes.
Sudan
138. Towards the end of 1965 a total ban was imposed by the Sudanese Government on Hong Kong imports and remained in force throughout the year under review despite formal representations.
United States of America
139. Under the terms of the five year Hong Kong/United States Comprehensive Bilateral Agreement on Cotton Textiles, which was con- cluded in 1966, a second stage of negotiations was to be held on the extension of the Long Term Arrangement regarding international trade in cotton textiles. These stage two negotiations commenced in Geneva in April 1967, immediately following the opening of the protocol extending the Arrangement, and were concluded in Washington later the same month. They were wider in scope than had originally been envisaged owing to a problem of definition of cotton textiles which had been latent since the agreement was reached but which became signifi- cant in trade terms only in the latter half of 1966. Hong Kong followed the definition of cotton textiles contained in Article 9 of the Long Term Arrangement, which is based on the criterion of the chief weight of fibre content; the United States followed a chief fibre value criterion, as they were entitled to do under Annex E of the Agreement. In return for certain concessions made by the United States, Hong Kong under- took to apply dual criteria whereby the export of textiles of chief weight or chief value cotton would be restrained. The aggregate restraint limit for the second year of the agreement was increased by a notional 15 million equivalent square years (an actual 5 million equivalent square yards was negotiated for the balance, 1st June 30th September 1967, of that textile year) to be increased by 5% in the third year of the agreement; provisions for 5% carryover and additional flexibility were also incorporated in the agreement.
-
140. The final out-turn in exports of cotton textiles to the United States in the second year of the bilateral agreement which ended on 30th September 1967, fell short of the aggregate restraint limit by 19.7 million equivalent square yards, reflecting a general contraction in the United States import market as a whole; but total shipments (324,300,000 equivalent square yards) amounted to 94.4% of the aggregate limit. In
34
the first half of the Third Bilateral Year, up to 31st March 1968, 164.5 million equivalent square yards (44.2% of the aggregate limit) had been shipped. This represented an increase of 18.1 million equivalent square yards, or 12.3%, over exports during the corresponding period of the previous year.
141. Early in 1968, the United States Federal Trade Commission announced the implementation, with effect from 12th February 1968, of its revised Rule 36 under the Wool Labelling Act. This provided for the testing of imported wool products to determine the accuracy of labelling. The American Importers Association filed a law suit in the Federal District Court in Washington and an injunction to withhold operation of the Rule was duly granted.
OVERSEAS OFFICES
Geneva Office
142. This was the first full year in which the Geneva Office of the Department was in operation. It was an eventful twelve months for the international trade organizations located in Geneva, starting with the concluding stages of the Kennedy Round of tariff negotiations and the agreement to extend the G.A.T.T. Long Term Arrangement on Cotton Textiles and concluding with the marathon Second United Nations Conference on Trade and Development (U.N.C.T.A.D. II), which was held in New Delhi in February-March 1968.
143. These developments are commented on elsewhere in this Report in the section regarding International Trade Organizations (paragraphs 111-117, 119-121). The Assistant Director in charge of the Department's Geneva Office followed them closely and reported regularly to Hong Kong. In his capacity as Counsellor for Hong Kong Affairs with the United Kingdom Mission in Geneva, he advised and assisted the Head of the Mission and British delegations whenever Hong Kong's interests were affected. In this connection he also followed the development of work in the Organization for Economic Co-opera- tion and Development (O.E.C.D.) on preferences and other questions concerning U.N.C.T.A.D.
144. Among the other activities of the Office the Assistant Director held a number of consultations with the Australian Mission on the question of the Australian scheme for extending preferential duty free or reduced duty quotas to imports from developing countries, and
35
particularly on certain quotas where Hong Kong was excluded from preference. On the basis of these consultations the Australian authori- ties agreed to extend preference to Hong Kong on a total of three quotas from which she had previously been excluded.
145. The Assistant Director also advised the Department on various specific questions related to Hong Kong's rights in the G.A.T.T. in consultation, as appropriate, with the G.A.T.T. Secretariat. One issue which arose in various contexts was the use by certain countries of so called anti-dumping duties against imports from Hong Kong. In the course of his work the Assistant Director maintained continuous and close liaison with the main United Kingdom Mission who afforded him considerable assistance. He also kept a watching brief on developments in the European Free Trade Association (E.F.T.A.) in case they were of relevance to Hong Kong.
146. The Assistant Director visited London from 11th - 13th July to confer with Mr. C. P. HADDON-CAVE, then Deputy Director Com- mercial Relations, on a number of items of current business. At the beginning of October Mr. H. D. MILLER, then Acting Deputy Director, paid a short visit to Geneva for a similar intensive review of the current work of the Office. The Assistant Director paid his annual visit to Hong Kong from 25th November - 6th December 1967. While in the Colony he discussed in detail with the Department all aspects of the Geneva Office as well as certain general policy issues. From 15th - 26th January 1968 the Assistant Director was in Bangkok as a member of the Hong Kong Delegation to the 11th Session of the E.C.A.F.E. Com- mittee on Trade. From there he took the opportunity to pay a short visit to Hong Kong for final briefing prior to U.N.C.T.A.D. From Hong Kong he proceeded to New Delhi where he remained from 29th January - 28th March for the whole of the U.N.C.T.A.D. Conference. He visited Hong Kong again immediately after the Conference to report on developments and to accompany Mr. M. P. PRESTON, deputy head of the Commonwealth Trade Department and a member of the British delegation to U.N.C.T.A.D., who was paying a visit to the Colony.
Washington Office
147. By the beginning of the period under review the Washington Office, which had been opened in February 1967, was fully operational. Consisting of the Assistant Director and one Secretary, it functions as an integral part of the Commercial Department of the British Embassy,
36
and is thus able to take advantage of various Embassy facilities and obtain invaluable assistance and advice from the Embassy staff.
148. The Office engaged in the normal activities of an Embassy commercial section, including the maintenance of continuous contact with United States Government Departments, Trade Associations, and foreign colleagues; advising British consular posts elsewhere in the United States on Hong Kong problems; attendance at numerous Con- gressional and other hearings, seminars and meetings; making frequent informal, and occasional formal, official representations as the interests of Hong Kong required; and keeping Hong Kong Government Depart- ments informed of legislative proposals, new regulations and other developments likely to affect Hong Kong's economy in one way or another.
149. Close contact was maintained with the Trade Development Council's office in New York, and the work of the two offices was effectively co-ordinated. Liaison with the Hong Kong Tourist Associa- tion's representatives in San Francisco and Washington was also often required.
150. In April 1967 the Assistant Director took part, with a team of Hong Kong officials and unofficial advisers led by the Deputy Director Commercial Relations, in negotiations in Washington which resulted in the improvement of Hong Kong's access to the U.S. cotton textile market.
151. A close watch was kept on the final stages of the Kennedy Round negotiations in June 1967, with a view to ensuring that Hong Kong's interests were not overlooked by the American negotiators.
152. About 100 trade enquiries were received by letter from pros- pective American importers of Hong Kong products, and passed to the Trade Development Council's office; many more enquiries came in by telephone, and were similarly passed on unless they could be readily answered on the spot. About 30 trade complaints against Hong Kong suppliers were received and taken up with Commerce and Industry Department. As the existence of the Office became known it began increasingly to be treated by the public as a general enquiry office on every aspect of Hong Kong life; so far it has been possible to cope with most questions without dislocating normal work.
153. During the 1967 disturbances in Hong Kong the Washington Office made every effort itself, and helped to co-ordinate the efforts of
37
the British Information Services and Consular posts, to reinforce the confidence of American businessmen and others in the Hong Kong Government's ability to keep order and in the ability of industrial and commercial circles to keep trade flowing.
154. The Assistant Director paid a two-week visit to Hong Kong in November 1967.
38
General
CHAPTER 4
INDUSTRY AND CERTIFICATION DIVISION
CERTIFICATION BRANCH
155. The Certification Branch issued 415,068 Standard, Common- wealth Preference and Comprehensive Certificates of Origin, an increase of 0.9% on the previous year. The declared value of goods certified was $3,925 million representing 56.9% of the total value of Hong Kong products shipped during the year. The total, when compared with $3,503 million for the previous year, represented an increase of 12%.
156. The number of separate manufacturing establishments regis- tered with the Department for the issue of certificates on 31st March 1968 was 7,611 a net increase of 1,492 over 1966-67. Of the 2,296 new factories registered during the year, approximately 6% were textile mills while factories producing garments and plasticware accounted for about 13% and 21% respectively.
157. 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
158. Standard Certificates of Origin issued during the year totalled 135,806, a decrease of 2.8% over the preceding year's total. The de- clared value of goods certified showed an increase of 4.6% compared with last year's figure.
159. As a result of a survey carried out by the Department on the manufacture of rattanware, bambooware, straw-ware and machine embroidered cotton/linen handkerchiefs and naperies, it was decided to revise the registration procedures for these products to permit sub- contracting provided proper records of subcontract work were main- tained by the registered factories.
160. It was decided that in view of the adverse publicity overseas on the health risks involved, Certificates of Origin for liquid filled toys
39
should be issued only if the applications were accompanied by a Health Certificate issued by the Director of Urban Services.
Commonwealth Preference Certificates
161. The number of Commonwealth Preference Certificates of all types issued during the year was 114,088. The declared value of goods covered by these certificates showed a 13.4% increase over that of the preceding year.
162. In April 1967 a Commonwealth Preference Manual consolidat- ing all existing instructions to approved accountants was published. This Manual, which serves as a guide to approved accountants, ensures uniformity of practice in the preparation of cost statements and raw material undertakings on behalf of manufacturers for claims to prefer- ence in respect of exports to the United Kingdom and other Common- wealth territories.
163. An agreement was reached with H.M. Customs and Excise, London, that as from June 1967, drafts of all proposed new and re- vised raw material undertakings to be given to H.M. Customs and Excise, London, must first be examined and cleared by the Department. This enables the Department to revise any wording requiring better legal definition and ensures that there will be no delay, for this reason, in acceptance of undertakings by H.M. Customs and Excise, London.
164. In November 1967, H.M. Customs and Excise, London, agreed with the Department's proposed segregation arrangements for the in- take by registered garment factories of non-Commonwealth fabrics containing man-made fibres. Factories which intended to use non- Commonwealth fabrics containing man-made fibres in addition to Commonwealth cotton fabrics were asked to revise their raw material undertakings to include the approved segregation arrangements.
165. Revision of the Commonwealth Preference Chart which shows the Commonwealth content percentage requirements of Commonwealth territories granting preference to Hong Kong manufactured products was completed in March 1968. The new Chart is to be printed and put on sale to the public.
Comprehensive Certificates of Origin
166. The total number of Commercial Comprehensive Certificates of Origin issued was 47,275 representing an increase of 16.9%. The
40
value of goods exported under these certificates showed an increase of 23% over 1966-67 mainly as a result of an upsurge in exports of hair wigs which totalled $198.3 mn. compared with $97.6 mn. last year. The number of Gift Plan and Tourist Certificates issued fell by 9% and 10% respectively, due to the fact that fewer American tourists visited Hong Kong in the latter part of 1967 as a result of the local dis- turbances.
167. In June 1967, the United States Foreign Assets Control agreed to permit the subcontracting of certain manufacturing processes to take account of the structure of Hong Kong industry and also entire produc- tion where adequate safeguards could be arranged in respect of goods to be exported under Comprehensive Certificates of Origin. Representa- tions were made to seek an extension of this agreement to cover the subcontracting of intermediate processes of manufacture by registered factories.
168. Following protracted negotiations with the United States Foreign Assets Control, a new certification procedure to cover the export of jadeite and nephrite manufactures to the United States was introduced in July 1967. The previous procedure for these products was suspended in June 1965. Exports of jadeite and nephrite manu- factures during 1967-68 were valued at $8.7 million.
169. Agreement was also reached with the United States Foreign Assets Control to increase the value of goods certifiable under Com- mercial Sample Comprehensive Certificates of Origin to $400. The previous maximum value was $120.
170. In order to provide for a more effective control over the issue of Local Sale Certificates for raw human hair for Comprehensive Certificate of Origin purposes, the Department announced that as from 4th January 1968 all imports of raw human hair must be escorted by authorized officers from Kai Tak Airport or the carrying vessel/ shipping company godown to the Kowloon Inspection Control for physical examination.
171. The approved sources of supply of raw human hair for the manufacture of wigs and other hair products to be exported to the United States were Indonesia, India, Japan, Pakistan, Philippines, South Korea, Taiwan and Thailand and the total weight of raw hair imported from these sources was 1,579,883 lbs.
41
172. Discussions were held with registered manufacturers and officers of the Agriculture and Fisheries Department on measures to improve the control on the certification procedure for agricultural products. It was decided that there was no economic justification in continuing to certify kudzu vine, cabbage, yam, mushrooms, lotus seed and wongpei and manufacturers were informed that as from 1st July 1968 Comprehensive Certificates of Origin would not be issued for these agricultural products. It was also agreed that the Agriculture and Fisheries Department should be responsible for advising the Depart- ment of quality standards for agricultural products acceptable for export to the United States. A Committee of four representatives of the industry was established to assist the Agriculture and Fisheries Department and the Department on all matters affecting this industry.
173. During the year under review, eight comprehensive certifica- tion procedures were revised and agreed by the United States Foreign Assets Control and 542 factories were re-registered under the revised procedures. A further five procedures were revised and forwarded to the United States Foreign Assets Control for consideration.
Certificates of Processing
174. 1,004 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 piece goods and transistor radios.
Miscellaneous Certificates
175. The Certification Branch also has to arrange for the verifica- tion of the signatures of the Superintendent of Gardens on Phyto- sanitary Certificates and the Director of Agriculture and Fisheries on Certificates of Origin for natural produce exported. During the year under review the Branch issued 1,325 such miscellaneous certificates.
Changes in Certification Requirements of Various Territories
176. The Customs Authorities of the Belgo-Luxembourg Economic Union advised in July that all imports of vacuum flasks and other isothermic containers from Hong Kong must be covered by Standard Certificates of Origin issued by the Department.
177. The Government of Malawi announced that preference duties for certain goods including textile piece goods, footwear and electric
42
torches were to be increased and brought into line with the full Most Favoured Nation rate in respect of imports from Hong Kong. The De- partment notified the trade in July 1967 that Commonwealth Preference Certificates would therefore not be issued for these items.
178. The Collector of Customs, Kingston, Jamaica advised in Sep- tember 1967 that Commonwealth Preference Certificates and Standard Certificates of Origin in support of imports from Hong Kong must be submitted in duplicate.
179. The Benelux authorities notified that all imports of umbrellas and cotton night garments, not knitted or crocheted, for women, girls and infants from Hong Kong must be covered by Standard Certificates of Origin issued by the Department.
180. The Department of Customs and Excise, Ministry of Finance, Cyprus, announced that as from 15th March, imports from Hong Kong claiming preference have to be supported by Certificates of Consign- ment. These Certificates were not required to be endorsed by the Department or accountants. Standard Certificates of Origin continued to be issued by the Department for goods not claiming preference.
Certification Co-ordination Committee
181. In August 1967, the Chinese Manufacturers' Association of Hong Kong was designated by Government as competent to issue Certificates of Origin under Article 11 of the International Convention relating to the Simplification of Customs Formalities, 1923 and was admitted as a full member of the Certification Co-ordination Com- mittee. Notification of this addition to the list of designated Hong Kong certificate issuing organizations was sent via the Secretary of State for Commonwealth Affairs to the Secretary-General of the United Nations who subsequently advised all interested States on 31st January 1968. A letter was also sent to all Consulates-General, Consulates, Trade Commissioners and Overseas Customs Authorities informing them of this and many countries have already informed the Depart- ment that they will accept Certificates of Origin issued by the Chinese Manufacturers' Association to cover exports of Hong Kong manufac- tured products.
182. The Committee now consists of representatives of the Hong Kong General Chamber of Commerce, the Federation of Hong Kong Industries, the Indian Chamber of Commerce, Hong Kong, the Chinese Manufacturers' Association of Hong Kong and the Commerce and Industry Department.
43
183. The Committee continued to meet regularly during the year to discuss various certification matters including the revision of the Certifi- cation of Origin Booklet, standardization of fees for non-Government Certificates of Origin, interchangeability of inspection staff, origin criteria for various products, policy on the use of brand names and trade marks and the certification of presumptive goods of non-Hong Kong origin for export to the United States.
184. The Committee issued its first circular in October 1967 to all registered factories and trade and industrial associations explaining the membership and aims of the Committee. Subsequent circulars described various co-ordinated measures to improve the Hong Kong certification system and ensure acceptance of certificates of origin by overseas governments. These included the requirement that all factories for which certificates of origin are required must be registered with the Department, the issue of clean certificates where no amendment or alteration is allowed and the issue of certificates of origin only for steel bars which bear registered physical identification marks.
185. The Protection of Non-Government Certificates of Origin Ordinance came into effect in September 1967 and as a result both Government and non-Government certificates are now accorded similar legal protection.
186. The Committee decided to standardize the format and wording of Certificates of Origin issued by each member organization and the new Certification forms were introduced on 1st March 1968.
Revenue
187. Fees for Certificates of Origin, collected by means of postage stamps, are $10 for Standard Certificates of Origin, Certificates of Processing and Commonwealth Preference Certificates, $35 for Com- mercial Comprehensive Certificates and $5 for all other certificates. Revenue from certificates amounted to $4,761,780 which was 5.2% greater than for the previous year.
INDUSTRY INSPECTION BRANCH
General
188. The Industry Inspection Branch, which is primarily responsible for the policing of factory registration conditions and procedures for the issues of various certificates of origin, continued to expand in order to
44
meet its increasing commitments in terms of factory and consignment inspections, investigations into certification malpractice and the pros- ecution of offenders, all of which are necessary to ensure the integrity of the certification system. With the addition of 15 Industry Assistants on a supernumerary basis, the technical establishment of the Branch reached 99 at the end of the year.
Inspections
189. The Branch carried out a total of 16,191 factory and consign- ment inspections (excluding those conducted at the Kowloon Inspection Control) during the year, an increase of 69% as compared with 1966-67. The number of consignment spot checks totalled 7,844 as compared with 1,072 in 1966-67. This rise can be attributed to the increase in the number of field staff and to a greater proficiency and expertise on the part of a number of newer officers as they gained experience. These inspections brought to light 1,783 certification offences as against 585 for the previous year; about 450 of these cases called for detailed investigation. Arising from a decision of the Certification Co-ordination Committee that factories wishing to obtain certificates of origin from non-Government certification agencies would, as a pre-requisite, be required to register with the Department, there was a significant increase in the number of applications for registration towards the end of the year.
190. A breakdown of the inspection figures for 1967-68 is as follows:
(i) Initial registration for certification purposes
(ii) Routine re-inspections
(iii) Commonwealth Preference undertakings
4,300
2,905
409
733
313
...
7,531
(iv) Comprehensive Certificates of Origin procedures
(v) Textile quota controls
(vi) Consignment spot checks
16,191
191. In the year under review, the Branch carried out a number of industrial surveys in conjunction with the Industrial Development Branch. In addition, 230 paint samples were drawn from toy manufac- turers for analysis by the Government Chemist. Toy factories found to be using paint containing an excessive lead content were advised to destroy the stocks of the toys concerned under the supervision of Branch officers. Following receipt of a number of complaints from overseas that
45
the number of functional transistors in some Hong Kong transistor radios was misrepresented, the Branch collected 18 samples from fac- tories and forwarded them to the Postmaster General for testing.
Kowloon Inspection Control
192. In addition to the field inspections reported in paragraph 189; the Kowloon Inspection Control carried out physical examinations of certain categories of consignments prior to shipment as indicated below:
(i) Selected items under Comprehensive
Certificates of Origin
(ii) Cotton garments, made-up goods and finished piecegoods exported to the United Kingdom under the High Cost Content Scheme
...
(iii) Antiques to the United Kingdom (iv) Embroidered handkerchiefs and
naperies under Standard Certificates of Origin/Commonwealth Preference Certificates
...
1967-68 1966-67 1965-66
22,898
18,575
16,526
3,630
3,026
2,525
54
51
77
12
6
Nil
26,594
21,658
19,128
193. The wig industry continued to expand and the cumulative total of hair products presented to the Control for examination prior to export to the United States had a recorded value of $196 million. Unfortunately, the incidence of malpractice in the industry made it necessary to tighten controls over imports of raw hair intended for manufacture into hair products for export under comprehensive certifi- cation by providing escorts from the point of landing to the Kowloon Inspection Control where detailed examination took place.
Investigations
194. With the enactment of the revised Protection of Non-Govern- ment Certificates of Origin Ordinance, the Branch undertook to inves- tigate certification offences and, where appropriate, to take legal action on behalf of the non-Government certificate issuing organizations. 167 major and 455 minor investigations were initiated, about 65% more than in the previous year, and 623 cases were concluded. As a result 78 factories were warned in respect of technical infringements of depart- mental procedures or legal undertakings, 7 factories were suspended from certification service and 7 factories and tourist shops were removed
46
from the certification register due to serious malpractice. The weight of investigational effort was directed towards manufacturers and importers engaged in substituting human hair of unauthorized origin in the pro- duction of hair products for export under comprehensive certification.
Prosecutions
195. The Prosecution Section came under heavy pressure during the period, and concluded 162 actions against individuals, factories and exporters for making false declarations on applications for Certificates of Origin or related documents, contravening legal undertakings made to the Department and for infringements of the Merchandise Marks Ordinance. Total fines amounted to $435,860 and in one case the defendant was additionally sentenced to a period of ten months' impris- onment. Details of prosecutions are as follows:
(i) Total actions
(ii) Persons arrested
(iii) Persons or companies summoned
(iv) Total fines
...
(v) Total number of person sentenced to terms of
imprisonment
Anti-Corruption Measures
162
30
35
$435,860
1
196. It is a matter for regret that many manufacturers failed to respond to the Department's repeated public appeals for co-operation to eradicate corruption. During the year, a total of 91 reports were received from Branch officers on improper offers made to them by factories proprietors, as compared with 108 in 1966-67. In some cases, there was sufficient evidence for the police to prefer charges against the offenders who were subsequently convicted and imprisoned.
INDUSTRIAL DEVELOPMENT BRANCH
REVIEW OF INDUSTRY
Textile Spinning
197. At the end of the period under review, there were 31 (32)* cotton spinning factories registered with the Department for certifica-
*Last year's figures shown in brackets.
47
tion purposes, employing over 20,554 (19,470) workers and operating 768,530 (729,827) spindles, an increase of 38,703 spindles over the total at the end of the previous year. Production of cotton yarn was approximately 309 (294) million lbs. ranging mainly from 10s. to 60s. counts, carded and combed in single or multiple threads.
198. The production of cotton/synthetic fibre was significant. At the end of March 1968, 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 (2) million lbs.
199. Production of woollen and worsted yarn amounted to 16.45 (17.4) million lbs. Most of this yarn was utilized by the knitting sector, a small quantity being woven into cloth.
200. 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 1968, there were 190 (172) cotton weaving factories registered with the Department for Certificates of Origin, with a total of 23,286 (22,017) looms installed.
201. Total production of cotton piecegoods was approximately 745 (685.31) million square yards and consisted chiefly of cotton grey drill, shirtings poplin, gingham, canvas and other bleached and dyed cloth and prints.
Textile Finishing
202. 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
203. The cotton knitting industry declined slightly. According to records compiled by the Labour Department at the end of March 1968, there were 233 (250) cotton knitting mills employing 9,078 (10,323) workers. Products were mainly shirts, gloves and undergarments. Cotton interlock materials and warp-knitted cotton fabrics were also produced.
Woollen Knitting
204. The woollen knitwear industry continued to grow. At the end of March 1968, there were 370 (341) factories in operation employing
48NE DEPARTMENT LIBRARY
some 26,093 (22,766) workers. Exports of woollen knitwear of all types, including gloves, were valued at $515.4 million, a decrease of 6.12% over the previous year.
Wearing Apparel
205. Hong Kong manufactures a wide range and variety of garments including shirts, underwear, outerwear (both knitted and woven), gloves, hats and caps, socks and stockings. By the end of March 1968, the industry employed a labour force of 83,638 (77,927) workers in 1,549 (1,480) industrial undertakings. The value of exports in 1967-68 reached $2,376 ($2,083) million, an increase of 14% over the value for the previous year.
206. The production of permanent-press garments is an important diversification of the clothing industry. This 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
207. The plasticware industry is the second largest industry in Hong Kong in terms of employment, production and export earnings. At the end of March 1968, there were 58,923 (51,323) workers employed in some 1,593 (1,468) factories. Exports of plastic products increased sub- stantially and were valued at $867.2 ($696) million.
208. Exports of plastic flowers, fruit and foliage continued to register a slight increase and were valued at $279.5 ($268) million in 1967-68.
Light Metal Products
209. By March 1968, there were 1,559 (1,460) factories manufactur- ing light metal products registered with the Labour Department, with a total labour force of 39,441 (34,505). Enamelware and metal torches continued to be the largest sectors of this industry.
210. The enamelware industry remained static as more developing countries undertook their own manufacture, sometimes with assistance from Hong Kong. Exports of enamelware in 1967-68 were valued at $40.8 ($38.6) million.
211. Hand-torches and lanterns continued to be a major export line. At the end of March 1968, there were 43 (46) factories employing some 4,395 (4,629) workers. Exports amounted to $77.6 ($74.3) million.
49
212. At the end of the period under review, there were eight factories employing 1,200 (1,344) workers who were engaged in the production of stainless steel cutlery. Value of exports in 1967-68 was $17.54 ($15.53) million. Stainless steel utensils were also produced and exports were valued at $15.58 (9.44) million.
Electronics
213. The electronics industry continued to grow. In March 1968, there were four factories producing silicon transistors, six factories engaged in the production of computer components and eighteen fac- tories producing radio components and sub-assemblies, three of which were engaged in the sub-assembly of integrated circuits. Exports of transistors in 1967-68 were valued at $131.5 ($119) million while exports of T.V. tuners amounted to $58.8 ($60) million.
214. During the year, exports of radios amounted to $215 ($212) million. There were 63 (43) factories in the radio industry at the end of March 1968.
Hair Wigs
215. The hair wigs industry completely recovered from the ban on imports imposed by the United States in 1965. According to records compiled by the Labour Department at the end of March 1968, there were 151 (88) hair wig factories employing about 12,000 workers. Exports in 1967-68 rose sharply to $198 ($98) million.
Machinery
216. 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, planing machines and platen presses. This industry also recorded useful exports during the year.
Shipbuilding
217. Activity in the shipbuilding and repair industry continued satisfactorily with an increasing proportion of orders for repair and maintenance work. In March 1968, the industry employed 10,053 (10,917) workers.
218. Exports of yachts, pleasure cruisers and other small craft for the period under review increased and were valued at $27 (16.1) million.
50
Shipbreaking and Steel Rolling Mills
219. Activity in the shipbreaking industry continued to decline. Although the number of ships broken up during the period under review increased to 36 (28) vessels, the total tonnage amounted only to 170,000 (232,584) gross tons. In the steel rolling sector, statistics published by the Labour Department at the end of March 1968 showed there were 16 (17) mills employing 1,063 (1,279) 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.
220. 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 on the eastern shore. Seven companies are already in operation and some of the other sites are expected to be in productive use shortly.
LAND FOR INDUSTRY
221. 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
222. Major development at Kwun Tong was completed. In March 1968, 503 (478) factories were in operation there, employing a total of 50,000 workers.
Tsuen Wan Kwai Chung Tsing Yi
223. The Kwai Chung development scheme, which is the largest in Hong Kong 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 popula- tion of 1.1 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.
Industrial Land Sales
224. Sales of industrial land remained low; only 2 (5) sites in Kwun Tong were sold by the Crown and there was no sale in the other parts
51
of the urban area. The unit land price was $30 per sq. ft. In the New Territories, a total of 6 (17) sites were sold by auction or granted by private treaty.
INDUSTRIAL CO-OPERATION
225. 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 43 (28) overseas visitors in connection with potential joint ventures, several of which have now commenced manufacture. 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 OF HONG KONG PRODUCTS
General
226. 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 several new standards were given legal or institutional validity. Since the Hong Kong toy trade with Britain is significant, the Hong Kong Government. maintained close liaison with the Home Office. The Branch also worked closely with the London Office and with officers of the Labour Depart- ment, the Urban Services Department and the Medical and Health Department in Hong Kong.
227. A number of circular letters on health and safety were sent to registered manufacturers to help them to overcome problems in regard to specific products.
52
Health Standards
(a) Lead in Paint (Toys)
228. During 1967-68, 300 samples of painted toys from 59 factories were taken for testing of which a number were found to have a lead content in excess of the maximum permissible level of 11,000 parts per million. In these cases, the manufacturers were asked to remove the coat of unsatisfactory paint from the toys and this was done under the supervision of officers of the Department.
Canadian Legislation Regarding Lead in Paint for Toys
229. The Branch informed the local industry through the medium of a Branch circular of proposed Canadian Legislation which will prescribe the maximum permissible level of lead in paint used on toys and other articles designed for children. The proposed maximum content of lead has been fixed at 0.5% (5,000 parts per million) of the total weight of the contained solids.
Lead in Toys
230. The Branch also issued a circular to the paints and toy indus- tries and trade organizations concerning the United Kingdom Toy (Safety) Regulations 1967. With effect from 1st November 1967, the Regulations imposed a ban on the importation of all celluloid toys with the exception of table tennis balls. Furthermore, paints applied to toys of all kinds may not have a lead content of more than 11,000 parts per million and after 31st October 1968, the permissible maximum is reduced to 5,000 parts per million. The Regulations also lay down certain specifications for paints used on toys regarding the maximum permissible toxic elements in such paints of antimony, arsenic, barium, cadmium or chromium.
'Donald Duck'
231. Following a press release in Britain which stated that Hong Kong made 'Donald Duck' toys constituted a health danger to children owing to excessive lead content, the Branch carried out detailed inves- tigations to trace the manufacturer and to determine the method used to produce this particular consignment. Resulting from these investiga- tions, the manufacturer was traced and the remaining stocks of 'Donald Duck' toys were destroyed under supervision by officers of the Industry Inspection Branch.
53
(b) Code of Practice for the Production of Liquid Filled Toys
232. This code was first issued in January 1967, and experience in its implementation had shown that certain modifications were required. These were incorporated in a re-issue of the Code of Practice after a series of consultations between the Branch and the Medical Officer of the Urban Services Department.
(c) Lice Egg Cells on Wigs
233. Following a press report in Canada which stated that an empty lice egg was found in a wig imported from Hong Kong, the Branch commenced immediate investigations. It was able to obtain from the Canadian authorities the names of factories which might have been responsible for exporting the consignment in question.
234. A thorough inspection of these factories was carried out by officers of the Medical and Health Department who confirmed that it would be impossible for lice to survive in human hair after the chemical processing involved in the manufacturing of wigs. The Canadian Trade Commissioner in Hong Kong was informed of the findings.
(d) Lead in Pewterware
235. Following a report from the United States that pewter drinking vessels and food containers imported from Hong Kong contained a high percentage of lead and were detrimental to health, the Branch made extensive enquiries which showed that lead was widely used in the pewterware industry. A circular was consequently issued to the industry, drawing attention to the possible health hazards arising from pewterware containing lead and providing manufacturers alternative lead-free formulae.
236. The Branch subsequently called a meeting with the manufac- turers and representatives of the Federation of Hong Kong Industries, at which it was agreed that the Department would obtain the relevant international standards for the reference of manufacturers.
Safety Standards
(a) Christmas Tree Decoration Lights
237. In January, the Hong Kong Government Office in London drew the attention of the Branch to the publicity Hong Kong manufactured Christmas tree decoration lights had received in the United Kingdom.
54
The December issue of 'Which' magazine, published by the Consumers' Association in Britain, contained an article on the results of a series of tests on Christmas tree lights on sale in British retail stores. Of the 20 sets tested, 16 were manufactured in Hong Kong.
238. In view of the importance of the United Kingdom market for Hong Kong manufactured Christmas tree lights and in an effort to bring all Christmas tree lights manufactured in Hong Kong up to an accept- able safety standards, the Branch called a meeting of local manufac- turers, the Federation of Hong Kong Industries and the Productivity Centre at which it was agreed that the Branch should co-ordinate a three-stage exercise, whereby, first, manufacturers would be given a detailed explanation of the requirements of the British Standards Institute's specifications for Christmas tree lights by the Productivity Centre; second, the Productivity Centre would give technical advice and assistance on request to those factories which were anxious to improve the safety aspects of their product; and third, the Federation would be prepared to test products and certify that they reached acceptable standards.
239. Consequently, a seminar was held by the Productivity Centre on 20th March and attended by most of Hong Kong's Christmas tree lights manufacturers. As a result of this seminar, several manufacturers are now being assisted by the Productivity Centre to improve the safety standards of their products.
(b) Electric Light Fittings
240. In October, a complaint was received from the British Home Office against a Hong Kong made striplight which was considered dangerous.
241. The Branch located the manufacturer who agreed to suspend further shipments. Samples of the product were collected and submitted to the Government Electrical and Mechanical Engineer for examina- tion and he agreed that the product represented a safety hazard. Indivi- dual manufacturers were interviewed and made aware of the criticisms. All agreed to the removal of this hazard by incorporating safety de- vices in their products as suggested by the Government Electrical and Mechanical Engineer.
(c) Inflammability of Nightdresses
242. In August, the Branch issued a circular to the garment manu- facturing industry on the enactment of the United Kingdom Nightdresses
55
(Safety) Regulations, 1967. The Regulations require that as from 1st September 1967, nightdresses must bear warning labels advising the user of the danger from fire and giving certain guidance for washing these dresses if the materials are treated with chemicals.
NON-FUNCTIONING TRANSISTORS IN RADIO RECEIVING SETS
243. Following a report in an American Magazine that Hong Kong was one of several sources which produced radios containing non- functional transistors, and advice from the Counsellor for Hong Kong Commercial Affairs in Washington that the United States Federal Trade Commission was in the process of promulgating regulations to stop the practice of mislabelling radios, the Branch issued a circular to all radio manufacturers, drawing their attention to the adverse publicity Hong Kong had received in the United States and advising them to discon- tinue the practice. Consultations were held with the industry which disclosed that in some cases, misleading marking of transistor radios was being done at the request of overseas clients, and that local manu- facturers would welcome action to stop this practice which they re- cognized was harmful to Hong Kong's trading image. The Department in a further circular warned that surprise checks would be carried out on factories and legal action taken against those who falsely marked their radio sets with the inclusion of non-functional transistors.
244. These checks were duly carried out. So far, some 80% of known factories have been visited and samples drawn from the produc- tion line for testing by the Telecommunications Division of the General Post Office. The checks revealed that 'dummy' transistors were no longer being included in locally manufactured radios.
ECONOMIC COMMISSION FOR ASIA AND THE FAR EAST
245. The Industrial Development Branch was responsible for brief- ing the three-man Hong Kong delegation to the Third Session of the Asian Industrial Development Council held in Bangkok from 11th-19th February 1968. The leader of this delegation was Mr. K. S. Lo, an unofficial member of the Trade and Industry Advisory Board.
246. The Branch briefed another three-man delegation which attended the 20th Session of the E.C.A.F.E. Committee on Industry and Natural Resources held in Bangkok from 20th-27th February 1968. The leader of this delegation was also Mr. K. S. Lo.
56
Asian Standards Organization
MAKINA
247. The first meeting of the Asian Standards Advisory Committee. was held in Bangkok from 25th to 27th November 1967. Hong Kong was represented at the meeting by Mr. Y. H. CHEN of the Federation of Hong Kong Industries. The main topics discussed were the promotion of co-ordination of standardization activities in the E.C.A.F.E. region, through mutual assistance, exchange of information, unification of basic standards and the establishment of national standards institutions.
IMMIGRATION ENQUIRIES
248. 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.
TRADE COMPLAINTS
249. The number of commercial disputes in which the Department was asked to mediate continued to increase. A total of 1,103 (1,027) 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-nine local firms or individuals sought assistance in obtaining settlement of disputes with overseas firms.
7
57
CHAPTER 5
DUTIABLE COMMODITIES AND LICENSING DIVISION
TRADE LICENSING AND RESERVED COMMODITIES BRANCH
Trade Licensing
250. The Importation and Exportation (Southern Rhodesia) Regula- tions, Cap. 50 continued in force throughout the year. These Regula- tions, which subject all imports from and exports to Southern Rhodesia to licensing control, were introduced in May 1966 in conformity with the policy of the United Kingdom Government in respect of sanctions against Southern Rhodesia.
251. During the year, Hong Kong continued to be a member of the International Coffee Agreement and to subject all imports of coffee from non-member countries to import quota control. Hong Kong's quota for the the 'coffee year' 1st October 1967 to 30th September 1968 was set at 1.65 million lbs.
252. In accordance with the policy of the United Kingdom Govern- ment, special controls on exports of strategic goods to Indonesia were relaxed in October 1967.
253. The number of import licences issued for all purposes, includ- ing the control of strategic goods and reserved commodities, totalled 32,853 (28,097)*. 235 (254) delivery verification certificates were issued to confirm the arrival in Hong Kong of strategic goods.
254. The majority of export licences issued by the Trade Licensing Section are for the purpose of exchange control. Total licences issued (excluding textile licences processed in the Textiles Branch) numbered 440,159 (433,733). 1,129 (1,353) delivery verification or landing certifi- cates issued by the appropriate authority in the country of import were produced by exporters as required on export licences covering strategic items.
Reserved Commodities
255. Certain essential food and fuel supplies are subject to licensing control. The Department keeps a close watch on commercial stocks of
* Previous year's figures shown in brackets.
58
these commodities to ensure that they are adequate to cover possible shortages.
(a) Rice
256. The Rice Control Scheme continued to be administered under the Importation and Exportation (Reserved Commodities) Regulations, Cap. 50. The basic quarterly import quota remained at 88,000 metric tons with 44,000 metric tons as the stipulated minimum reserve stock.
257. The events of 1967 imposed a severe test on the working of the Rice Control Scheme. During the disturbances which started in May 1967, malicious rumours that rice was in short supply caused a run on rice shops and a temporary dislocation in distribution in June, and retail prices rose to an unprecedented height of HK$1.80 - 1.90 per catty for high quality rice. Immediate measures were taken to restore the situation to normal. Apart from a large-scale publicity campaign to assure the public that rice stocks were adequate, a 'direct purchasing scheme' was introduced to enable commercial and industrial concerns with over 200 employees to purchase rice direct from importers at ruling wholesale prices. A number of department stores also assisted by setting up temporary retail outlets at which the public could obtain rice at a reasonable price. Rice importers co-operated with the Depart- ment in offering plentiful supplies of rice at stable prices in the whole- sale market. Wholesalers in their turn did their best to speed up rice distribution to enable large quantities of rice to be delivered to retailers in various parts of the Colony. The Hong Kong-Yaumati Ferry assisted by giving priority to rice lorries crossing the harbour. These measures had an immediate effect and, in less than four days, retail prices returned to a reasonable level and remained stable throughout the remainder of the year.
258. Rice supplies in South-East Asia became relatively scarce during the year resulting in pressure on prices. Importers were en- couraged to seek new sources of supply and substantial quantities of rice were brought from the U.S.A. Some rice also arrived from Mexico, a hitherto untapped source, and larger quantities were contracted for delivery during the year. This diversification stood Hong Kong in good stead when the Thai Government, in an attempt to stabilise domestic rice prices, suspended the issue of export quotas in the middle of October. This move did not appreciably affect rice prices in Hong Kong. With supplies of new crop rice becoming more abundant and with a
59
fall in domestic prices, the Thai Government permitted limited export again in the middle of December.
259. In March 1968 the Thai Government increased the rice export premium, but in spite of this, and due to a temporary reduction in demand, c.i.f. prices for all grades of Thai rice dropped by some £2-7 a ton towards the middle of March.
260. Wholesale prices remained stable despite the devaluation of sterling in November 1967 and the subsequent alteration in the exchange rate of the Hong Kong dollar against the pound. There were slight increases in retail prices in isolated cases but these soon returned to normal. The most noticeable effect on import prices was the average increase in the price of China rice by some 10%.
261. On the whole, the Rice Control Scheme operated successfully during the year despite the serious difficulties caused by uncertainties of supply and by internal disturbances. The public, which had hitherto tended to view the Scheme with suspicion, began to understand the objectives of the Scheme (i.e. to ensure regular supplies of rice to con- sumers at stable and reasonable prices) and to appreciate that these objectives had been achieved, when confronted with a situation the Scheme was designed to guard against. The Department will continue to pay close attention to developments in the rice trade to ensure that supply and demand are reasonably balanced and that prices do not fluctuate unduly.
262. Total rice imports during the year were 352,284 metric tons (367,618) as follows:
Source
Thailand
China
Cambodia
U.S.A.
Australia
...
N. Vietnam
Pakistan
Burma
...
...
Egypt
Italy
N. Korea
Uruguay
Taiwan
...
...
...
...
1966-67
1967-68
M/Tons
%
M/Tons
%
235,308
64.0
155,390 44.1
...
103,085
28.0
83,677 23.8
13,093
3.6
37,025
10.5
500
0.1
60,506
17.2
5,710
1.6
5,651
1.6
3,845
1.1
1,023
0.3
3,101
0.8
866
1111 281
1,161
0.2
838
250
877
1,987
90
18828188
60
Argentine
Timor
Mexico
Macau
Singapore
1966-67
1967-68
Source
M/Tons
M/Tons
%
404
0.1
265
0.1
3,140
0.9
10
2,100
0.6
367,618
100.0
352,284
100.0
Offtakes from stocks were as follows:
1966-67
1967-68
Type
Whole Rice—
M/Tons %
M/Tons
%
Thai Origin
Chinese Origin
Other Origin
108,614
31.0
101,249
28.9
97,979
27.9
88,430
25.3
...
25,799
7.4
77,906
22.3
232,392
66.3
267,585
76.5
Broken Rice-
Thai Origin
98,209
28.0
66,832
19.0
Glutinous Rice-
Thai Origin
8,023
2.3
Chinese Origin
608
0.2
Other Origin
811
0.2
222
9,337
2.7
621
0.2
43
9,442
2.7
10,001
2.9
Sub-Total
340,043
97.0
344,418
98.4
Low Grade and Other
Rice for Industrial
Use/Poultry Feeds-
Thai Origin
2,959
0.8
Cambodia Origin
3,151
0.9
Other Origin ...
4,553
58883
1,717
408
0.1
1.3
3,435
528
0.5
1.0
10,663
3.0
5,560
1.6
Total Offtakes
350,706
100.0
349,978
100.0
(b) Frozen Meat
263. In August, as a consequence of the disruption of food supplies from China, it was decided to register importers of frozen meat as stockholders in order to obtain more reliable information concerning stocks and consumption patterns. Over 100 firms responded to the invitation to register, each one undertaking to keep a certain quantity of frozen meat as reserve stock.
61
264. Imports of frozen meat under licence amounted to 34,173 (33,034) long tons in 1967-68. Of this amount, 81.1% came from China. 265. Consumption of frozen meat and fresh meat during the past three years has been as follows:
Fresh Meat Frozen Meat
1965-66
1966-67
1967-68
L/Tons
L/Tons
L/Tons
106,948
106,960
93,881
24,046
32,245
32,794
130,994
139,205
126,675
(c) Frozen Poultry
266. To enable the Department to obtain more information regard- ing imports of frozen poultry, which is becoming increasingly popular in Hong Kong, this item was added to the Schedule of the Importation and Exportation (Reserved Commodities) Regulations, Cap. 50 with effect from 4th September 1967. The result of this was to make frozen poultry a 'reserved commodity' and to subject imports and exports of this commodity to licensing control.
267. Imports of frozen poultry during the year amounted to 11,943 long tons. The major source of supply was the U.S.A. followed by China and Denmark. These countries supplied 54%, 26% and 12% of total imports respectively.
(d) Coal
268. Total imports for 1967-68 amounted to 93,793 (144,128) long tons. China remained the main supplier of coal and had 52.5% of the total import market.
(e) Firewood
269. Imports of firewood amounted to 5,629 (7,861) long tons.
DUTIABLE COMMODITIES BRANCH
Revenue from Excise Duties
270. The total net revenue from duties and licence fees during the financial year 1967-68 was $324,887,000, an increase of 2.0% over the previous financial year's $318,659,000.
271. For comparison, net revenue figures for the year under review and the past two years are summarized below:
62
in $'000
1965-66
1966-67
1967-68
Tobacco
93,684
118,236
121,503
Hydrocarbon Oils
82,391
103,713
108,121
Liquor
77,019
85,261
82,971
Table Waters
6,244
7,296
8,037
Methyl Alcohol
40
55
49
259,378
314,561
320,681
272. The above figures show a general increase in revenue collection from all categories with the exception of liquor. However, actual revenue was $8.4 million (or 2.6%) below the original estimate of $329.1 million. This shortfall may be attributed to the disturbances at the beginning of the year and the ensuing unsettled period.
273. A full breakdown of gross collections, together with refunds and drawback payments, is shown in Table 5.
(a) Tobacco
274. Net duty collected from tobacco totalled $121.5 million, an increase of 2.8% over last year's collection, but short of the original estimate by $5.5 million or 4.3%. The principal cause of this shortfall was the substantial drawback payments cleared in the first half of the year under review which should have been met in 1966-67.
275. Collection of $1.1 million from Chinese prepared tobacco accounted for a 2.1% increase over the previous year's figure.
(b) Hydrocarbon Oils
276. Net revenue from this source accounted for $108 million representing an increase of 4.2% over 1966-67.
277. Although the revenue derived from this head was $0.9 million below the original estimate, it was $4.4 million above the previous year's figure. The increase is indicative of a further steady growth of the local industry and an increased use of private vehicles, which consume fuels drawing higher duties, since the disturbances. On 28th June 1967 a new duty on liquefied petroleum gas at the rate of 2 cents per pound was imposed. The quantity consumed as from 28th June 1967 to March 1968 was 20 million lbs. yielding a return of $0.4 million.
63
278. In recent years liquefied petroleum gas has become an increas- ingly popular item of fuel both for domestic and industrial purposes. The following data reveal the trend:
Period
1965-66
1966-67
1967-68
...
Quantity in lb.
14,719,000
23,601,000
30,908,000
(c) Liquor
279. Net revenue from intoxicating liquor totalled $84.1 million, a decrease of $2.6 million or 3.3% compared with 1966-67. The contri- butory factors were a decrease in non-essential purchases by the public during and after the disturbances, and few speculative withdrawals from bond in the pre-budget period.
280. Revenue from spirituous liquor which includes chiefly per- fumery products decreased by $142,000 or 7.5% compared with last year's $1.9 million. A decrease was also recorded for methyl alcohol.
(d) Table Waters
281. Net collection from this source exceeded the estimate by $1.0 million because of the long hot summer experienced in 1967 and increased consumption due to a rising standard of living and the un- usally high salinity in Hong Kong's water supply for a considerable period (caused by low water supply and the consequent need to draw from the newly-completed and not-yet filled Plover Cove Dam, formerly a sea-inlet).
Revenue from Licences
282. Types of licences and revenue collected therefrom are shown in Table 6. Revenue from this category was $148,000 below the estimate of $4.4 million. Nevertheless, the overall figures registered an increase of $109,000 or 2.6% over last year.
283. Net revenue from licences, as compared with previous years is summarized below by commodities rather than by types of licences:
Liquor Tobacco
Hydrocarbon Oil
Table Waters
1965-66 2,745
1966-67 3,012
785
862
195
193
...
...
25
25
4
4
in $'000 1967-68 3,127 851 194 29 4
Ship and Harbour Vessel Methyl Alcohol
JIT
1
3,754
1
4,097
1
4,206
64
General
CHAPTER 6
PREVENTIVE SERVICE
284. Experience has demonstrated that considerable expertise is required to cope with modern methods of evading duty payment and the more sophisticated modus operandi of smugglers. To gain such expertise by normal training methods is difficult and costly, and it was therefore decided to re-organize Preventive Service operations on func- tional lines to allow for a greater concentration on specific tasks and problems. The change-over started on the 1st November 1967 and was effected without any interruption of normal routine. The major forma- tions of the Preventive Service are now:
(a) Excise Division;
(b) Preventive Operations Division; and
(c) Training and Administration Division.
The results achieved had, by the end of the year, already demonstrated an increase in expertise and success in the operational and administra- tive areas. Many facets of dutiable commodities control which had not appeared on the surface for some years were rediscovered and some apparent loopholes in the controls were blocked. Whilst there has been a greater concentration on the security of the revenue derived from dutiable commodities, it is also true to say that through the functional division of the Service, it has been possible to effect a greater, if less widespread, concentration on preventive operations and general ad- ministration.
285. In furtherance of Government's aim of achieving closer contact and co-operation with the public, meetings have been held with ship- ping, airline, warehouse, oil and distillery organizations to discuss mutual problems connected with controls. Officers of the Service have also given public talks and generally sought to bring the Service closer to the people of Hong Kong.
286. Seizure figures were not affected by the 1967 civil disturbances, although there was some interruption of land patrol activity. Despite
65
the interruption seizures of treated diesel oil (14,807 gallons) increased by 100% over the previous year and, in addition, 18,884 gallons of detreated diesel oil were seized. An appeal was made to the public to assist the Service in its activities against illegal distillers and the manu- facturers of adulterated and fake liquors. The result, over a limited period, was remarkable and information came from many sources. The quantity of fermenting material seized amounted to 159,000 gallons, as against approximately 88,000 gallons during the previous year. Distilla- tion of the fermenting material seized would have produced 44,000 gallons of Chinese type spirit. Major narcotic seizures during the year were 1,003 lbs. of opium and 880 lbs. of barbitone. Several hundred gallons of acetic anhydride, often used in the manufacture of heroin, were also discovered and seized.
287. On the 30th July 1967, the Harbour Division of the Service moved from Fire Brigade Building to new offices in the east arm of the New Government Pier at the Central Reclamation. Facilities are extremely good; concentration of all harbour activities in one water- front base of operations has led to greatly increased efficiency.
288. Despite some disruption of transport and other facilities during the civil disturbances, officers of all ranks remained steadfastly loyal; there was no absenteeism, and members of the Service responded with efficiency and enthusiasm to calls made upon them for assistance to other Section of the Controls Division in connection with food supplies.
Preventive Service Review
289. The fourth Preventive Service Review was held on 16th March 1968 at the Police Training School parade ground. The parade was attended by many senior citizens and for the first time in the history of the Preventive Service, His Excellency the Governor took the salute. His Excellency later commented favourably on the bearing and turn- out of the officers and also on the organization of the Review.
Hydrocarbon Oils
EXCISE DIVISION
290. The civil disturbances of 1967 caused some disruption of public transport and the number of illegal hire cars increased sharply. Taking advantage of the situation, drivers of these cars made extensive use of industrial diesel oil, both treated and detreated. Treated oil seizures
66
amounted to 14,807 gallons (7,364)* and detreated oil seizures to 18,884 gallons. In all, 12,934 vehicles were checked and 534 (522) arrests were made. To provide more effective control over the handling of treated oil at oil depots, 14 automatic mechanisms with dye marker tanks and bulk meters were installed with the co-operation of oil companies.
Adulterated Liquor
291. A raid on premises in Hong Kong resulted in the arrest of a manufacturer who was subsequently charged with custody of dutiable goods and making adulterated liquor. Fines totalling $6,000 or 9 months imprisonment in default of payment were imposed. In a similar case in Kowloon, two persons were arrested and fines totalling $10,500 were imposed.
Illicit Distilling
292. Reference has been made in the General Section above to the extent of illicit distilling operations, as indicated by the seizure figures during the year. For the effective discharge of their revenue protection duties, excise patrols depend on their routine but painstaking scrutiny of areas suited to this illegal activity, and on information both from members of the public and informers. The equipment used by the unauthorized distillers is becoming more sophisticated and efficient, with a corresponding increase in their profits and, thus, in incentive to operate. The successes of the excise patrols have led the distillers to take even greater precautions against discovery which has made the Preventive Service's task increasingly difficult; it has also underlined the need for accurate information. Concentration on the retail outlets for illicitly distilled liquor has proved successful in certain cases, and the cancellation of the retail liquor licences of persistent offenders has had a deterrent effect.
PREVENTIVE OPERATIONS DIVISION
Searches
293. Preventive Service Officers searched 894 (806) ocean-going vessels within the harbour, and launch crews searched 4,131 (11,798) local craft for narcotics, dutiable commodities and illegal immigrants.
294. The number of persons who crossed the border through the baggage examination hall at Lowu this year was 261,302, a sharp
* Last year's figure shown in brackets.
decline from the previous year when 593,332 persons were processed. At Kai Tak Airport 152,694 (59,515) items of freight were examined and of these 3,319 (2,913) were detained for payment of duty. 4,430 (3,399) aircraft were checked during the period and a total of 644,033 (557,823) passengers were processed. Incoming passengers from Macau processed by the Waterfront Section numbered 923,950, a reduction compared with the previous year's figure.
295. Preventive Service launches steamed a total of 7,723 hours (15,593) and patrol vehicle ran a total of 204,941 miles (187,710).
Narcotics
296. Preventive measures to combat illegal trafficking in narcotics continue 'round the clock'. Ship search parties searched 894 sea-going vessels, whilst 807 were placed under guard and attended by cargo search parties for cargo examination. A total of 86 narcotic seizures were effected.
297. Several consignments of acetic anhydride, totalling 780 gallons, were seized from Taiwan cargo vessels. Research activity led to the seizure of 880 lbs. of barbitone in two consignments of cargo from Europe. The barbitone was manifested as glucose. Further investiga- tion led to the arrest and subsequent imprisonment of the importer. A mobile party in Kowloon intercepted a private van which was then abandoned by the occupants. The van contained 19 sacks of raw opium weighing a total of 1,003 lbs. 14 blocks of morphine weighing over 11 lbs. were discovered in the baggage of a passenger disembarking from a hydrofoil on arrival from Macau. One prosecution against a United States serviceman for the importation and possession of 138 marijuana cigarettes resulted in the imposition of a 3-month prison sentence. 291.2 grammes of marijuana were seized from U.S. service- men on rest and recreation in Hong Kong.
Bullion
298. Of the 838.8 lbs. of gold seized during the period, 60 lbs. were found in a boiler on board a ship and behind a ceiling lamp fixture in the cabin of a crew member; 132 lbs. were found in two cases contain- ing generators seized at Kai Tak Air Freight Bond, and 646.73 lbs. were seized from individual professional gold carriers on arrival at Kai Tak Airport. The method favoured by professional gold carriers
68
continues to be specially designed close fitting waistcoats worn beneath the clothing. A total of 9 persons were arrested and dealt with accord- ing to the law.
Unmanifested Cargo
299. There has been a noticeable increase in the discovery of general cargo not entered upon ships manifests and seized as unmanifested cargo under the Importation and Exportation Ordinance, Chapter 50. Two large consignments of Philippine silver coins were seized as unmani- fested cargo. The first seizure, amounting to nearly 700 lbs. was dis- covered in a passenger's cabin on board s.s. 'Oronsay', whilst the second seizure of 1,167 lbs. was found in cargo on board the s.s. 'Philippine'. Confiscation proceedings in respect of these consignments and a con- signment of 12,000 cigarette lighters and 13,595 fountain-pens also seized as unmanifested cargo were underway at the end of the year.
Marine
300. The six cruising launches of the Service continued to operate under the control of the Police in support of anti-illegal operations until October 1967, when the two larger launches, C. & I. Launches 1 and 2 were returned to the Service. The four smaller Preventive Service launches remained on loan to the Police up to the end of the year. At the end of July, the Marine Section moved to accommodation in the west arm of the pier.
301. During the year courses of navigation and engineering at the Marine Department Nautical Training School were attended by 21 members of the inspectorate and 74 other ranks of the Marine Division.
TRAINING AND ADMINISTRATION DIVISION
General Investigation Bureau
302. The Section of the Service, together with the Prosecution Section, comes under the Training and Administration Division. Of its varied tasks, action taken under the Merchandise Marks Ordinance, Chapter 41, forms a major part. During the year, 41 authorizations to search premises and seize goods in connection with suspected offences under this Ordinance were executed. Evidence of offences was revealed in 21 cases and two persons were summoned and fined a total of $4,750.
69
Prosecution Section
303. The number of court actions for the year totalled 4,156 an increase of 19 over the previous year. Arrests at 1,014 were 245 less than the previous year.
304. The following table illustrates the trends over the last three
years:
Actions Arrests
Fines
1965-66
3,691
1966-67
1967-68
1,399 $159,477
4,137 1,259 $154,816
4,156
1,014
$437,808
305. Details of majors confiscations ordered by the Court are given in Table 7, and of dutiable commodities and dangerous drugs in Table 8.
Training
306. Mr. F. BISHOP, C.B.E., completed his assignment as Training Adviser to the Commissioner of the Preventive Service in November 1967. His second Report, containing recommendations on training in management and administration, was presented in July. The main recommendations in the Report concern overseas training in manage- ment and attachments to H.M. Customs and Excise for supervisory grades, training in management and administration for Revenue Sub- Inspectors and Inspectors at induction and refresher courses, and senior officers courses at the proposed Residential Training School. Mr. BISHOP also made certain recommendations concerning the ad- ministration and organization of the Service.
307. The Hong Kong Preventive Service Training Centre is situated at the Kwun Tong District Branch Offices Building in Kowloon. It is headed by a Senior Revenue Inspector with four Instructors responsible for giving instruction in the classrooms and on the drill square. The instructors are also assigned the duties of preparing training notes and dossiers.
308. During the year 17 Revenue Sub-Inspectors, 58 Assistant Revenue Officers were recruited. Upon enlistment in the Service, re- cruits of Revenue Sub-Inspector grade are given an eighteen weeks Induction Course, whilst Assistant Revenue Officer recruits undergo training for a period of ten weeks. The curriculum covers lectures on corruption, excise and preventive duties, searching techniques, methods
70
of investigation, the principles of law, rules of evidence, court proce- dure, personnel management, Government regulations and Service Standing Orders, foot-drill and self-defence. Recruits are also attached to sections and stations within the Service for practical training.
309. Recruits attending induction courses are required to stay in the Preventive Service Trainees' Quarters which are near the Training Centre. Trainees are under the supervision and guidance of a Barrack Warden during evening studies.
310. Refresher courses were held for 58 Assistant Revenue Officers and one Woman Assistant Revenue Officer.
311. During the year the first Preventive Service Seminar was organized to prepare 36 members of the inspectorate for the annual promotion examination.
312. Eighteen Revenue Sub-Inspectors were taught to drive Govern- ment scooters.
313. Eight members of the inspectorate attended a Prosecution Course arranged on behalf of both the Labour Department and the Commerce and Industry Department. Subjects included preparation and presentation of cases, and laws of evidence relating to the burden of proof, admissions and confessions.
314. English at various levels was taught to 44 members of the rank and file in the Departmental English Classes. All students sat the English Examination held by the Examinations Unit, Colonial Secretariat, on completion of the school term.
315. Four members of the inspectorate go to the United Kingdom for training in each financial year. Officers receive theoretical and prac- tical training with H.M. Customs and Excise and attend middle-level Management Courses. During the period under review, three officers visited the United Kingdom and attended the Supervisory Management Course at Chesters, Glasgow.
316. One Senior Revenue Inspector was attached to H.M. Customs and Excise during a Merit Trip to the United Kingdom.
317. Officers of the inspectorate also receive training in Supervisory Management organized by the Hong Kong University and the Hong Kong Management Association.
71
Staff and Discipline
318. Mr. L. C. MILLINGTON, Chief Preventive Officer, left the Colony on pre-retirement leave on 31st October 1967; he was succeeded by Mr. A. L. TOKLEY. The award of the Imperial Service Order to Mr. MILLINGTON was announced in the New Year Honours List.
319. During the year two Revenue Inspectors, two Senior Revenue Officers, and one Woman Senior Revenue Officer retired, and eight Revenue Sub-Inspectors, six Women Assistant Revenue Officers and 33 Assistant Revenue Officers resigned.
320. One Revenue Inspector, two Revenue Sub-Inspectors, and four Assistant Revenue Officers transferred to other departments of Government.
321. Nine commendations for good work and initiative were awarded during the year.
322. Punishments were awarded as follows:
Cautions
Reprimands
Severe reprimands
1966-67
1967-68
...
23780 en en
3
8
4
3
3
1
...
1
26
9
Fines
Reduction in rank Dismissals
...
...
...
...
To do extra duty
...
Total
FOOD UNIT (ESSENTIAL SERVICES CORPS.)
323. The experience and training of the Food Unit of the Essential Services Corps was tested in May 1967, when a request was received from the Police Force Catering Officer for assistance in delivering rations to Police Units whose normal food supply arrangements were under strain as a result of long periods of standby. On the night of 17th May, rations for 7,250 men were delivered to Police Divisions in Kowloon, and 23rd May for 4,250 men to Divisions in Kowloon. On the first night 32 members of the Food Unit were involved and on the second night 18. Despite the imposition of curfews on a number of occasions, the Food Unit was not called upon to undertake any other duties in connection with the disturbances, although preparations were made for the supply of rations to essential civilian personnel if required.
324. An Essential Services Corps Exercise was held in March 1968, with the Food Unit practising the distribution of rice to the population through selected rice retailers under simulated emergency conditions.
72
CHAPTER 7
STATISTICS BRANCH
GENERAL
325. On 15th November 1967 the new Census and Statistics Depart- ment was created by bringing together the Office of the Commissioner of Census and Statistical Planning and the Statistics Branch of this Department. The Statistics Branch became the Economic Statistics Division of the new Department. Since, however, the Statistics Branch was part of this Department for eight months of the year under review and since the Department of Census and Statistics will not issue an annual report this year, it is appropriate that the work of the Branch should be recorded in this report.
326. The Statistics Branch is responsible for collecting, compiling and tabulating the Colony's trade statistics; for implementing and en- forcing the Importation and Exportation (Registration of Imports and Exports) Regulations 1966; for collecting price information and calcu- lating the Consumer Price Index; for conducting surveys on household expenditure; for editing and publishing the monthly Statistical Supple- ment 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.
TRADE STATISTICS
Registration of Imports and Exports Regulations
327. The Importation and Exportation (Registration of Imports and Exports) Regulations 1966, which had introduced certain changes in respect of the procedure, charges and method of payment concerning trade declarations, was in the course of review during the year and a paper prepared as a result of this review was presented to the Trade Development Council on 27th November 1967. The paper recommended that the present system of collecting ad valorem charges from trade
73
declarations should remain and be subject to a further review in one year, and that certain minor amendments should be made to the regula- tions to increase the number of exemptions and to lengthen the time within which declarations must be lodged.
328. As from December 1967, a notice to importers and exporters was published in five newspapers (three in Chinese and two in English) as well as in the Daily Commodity Quotations towards the end of each month. This notice reminds merchants that trade declarations covering shipments made in a particular month should be lodged not later than the 6th day of the following month, and warns that prosecutions will be initiated without any further reminder against those who fail to comply with these requirements without reasonable excuse. During the year, over one thousand information reports were passed to the Preven- tive Service for action and 575 merchants were prosecuted. Fines were imposed in most cases and were heavy when an offence was repeated.
329. Declarations reporting shipments said to be exempted from the requirement of regulations 4 and 5 of the Regulations were under close examination. 9,356 declarations of this kind were lodged and 264 of them not qualified for exemption were returned to the respective de- clarants for re-submission. 144 reminders were sent to importers who had failed to lodge declarations covering postal packets the contents of which were valued at $4,000 and over. 497 letters were sent to importers and exporters who had submitted declarations covering postal packets valued at less than $4,000; they were informed that such transactions were not required to be declared and should be re- ported monthly on Form C. & I. 254. 247 declarations affixed with postal stamps were received through the post and were subsequently returned for re-submission.
Cargo Manifests and Trade Declarations
330. During the year, 42,919 (51,863)* sea cargo manifests were received. Against these and many other air and land cargo manifests, over one million declarations were checked with a view to ensuring that a true and complete import or export declaration was lodged on time in respect of each consignment in the manifest.
331. A total of 1,072,390 (1,092,772) import, export and re-export declarations was received during the year. Of the above total 100,033
* Last year's figures shown in brackets.
74
(87,132) declarations were lodged with the Kowloon Office of the De- partment. Classified by type of declarations, the figures are as follows:
Imports Exports Re-exports
+
1966-67
1967-68
473,973
423,586
484,363
524,818
134,436
123,986
These declarations were further checked for the purpose of assigning a correct code number to each commodity item declared, to the country of consignment, and the country of origin; the quantity, the declared value and the unit value were also checked. As a result, queries about incorrect details given on declarations and manifests totalled 45,616 (51,773).
332. Declarations with a high value were subject to a process of strict verification and those exceeding $200,000 were scrutinized by a senior officer. Queries were sent when values declared were not in line with average values, and supporting documents of the transactions were called for and investigation instituted if required.
333. 30,271 (48,303) reminders were sent in respect of late declara- tions during the earlier part of the year and the practice of reminding merchants of late declarations was discontinued once a regular monthly notice was published in the daily newspapers.
Parcel Post Statistics
334. Under the Importation and Exportation (Registration of Im- ports 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 completed 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 830 (438) returns was received during 1967-68. The number and value of parcels declared were as follows:
75
#
Despatched :
Number of parcels Value
Received:
1966-67
1967-68
4,075
9,151
$3,728,707
$4,488,540
Number of parcels Value
13,607
13.027 $10,478,078 $8,406,712
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.
Revenue and Cost
335. Details of the ad valorem charges collected and fees for services rendered by the Trade Statistics Section during the year ended 31st March 1968 with comparative figures for the previous year, are shown below:
1967-68
1966-67
$
$
Ad valoren charges on declarations Stamp duty on declarations
4,414,343
9,671,226
1,188,870
376
Fees for landing certificates
8.330
5,910
Fees for statistical information
10,575
9,705
Fees for endorsements
4,400
3,390
Total
5,626,518
9,690,607
336. The stamp duty collected during the year 1967-68 was derived from declarations bearing defaced postage stamps received through the post. The amount of ad valorem charges collected exceeded the estimate by almost $1 million. This sum of money, less a million dollars ear- marked for the preparation of trade statistics, is used to provide over half of the income of the 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. A sum of $13,531.50 was recovered as a result of intensive check on the charges collected in relation to declared values. Refunds amounting to $6,273 were made in response to claims for charges over-paid.
Classification
337. A new edition of the Hong Kong Imports and Exports Classi- fication List was issued for use as from January 1968. In this new edition, a considerable number of commodity items were separately classified so as to facilitate comparisons of Hong Kong trade statistics
76
with those published by other countries. The items affected were mainly in the meat, chemical, medicinal, machinery and clothing divisions. The number of commodity items classified now totals 2,389. The index of commodity items was also greatly enlarged. The preparation was under way of a table of concordance for the code numbers of commodity items included in the new edition with those in force in the previous years since 1959.
Services
338. 591 landing certificates in respect of goods landed in the Colony were issued and 339 copies of cargo manifests and trade declarations were endorsed. 552 lists of importers/exporters engaged in a line of specified commodity items were prepared at the requests of consulates, trade commissions and the Trade Development Council. 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 statistical classification and code numbers and about published statistics. Some 13,500 verbal and 1,100 written enquiries were handled, compared with 12,600 and 1,200 respectively in the previous year.
Computerization
339. Discussions continued with the Organizational Surveys Unit in preparation for the change over to a computer for the processing and tabulating of trade statistics. By the end of March 1968, the work of preparing programme specifications, writing, compiling and testing was up to schedule.
CONSUMER PRICE INDICES
340. From January 1967 two sets of Consumer Price Indices 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 Govern- ment staff on Scale I.
77
341. Movements of the General Consumer Price Index :
GENERAL CONSUMER PRICE INDEX FIGURES FOR EACH MONTH FROM
APRIL 1967 TO MARCH 1968
(1963-64 = 100)
Section of Commodity/Service
Weights
attached
Apr. 1967
May 1967
June 1967
July 1967
Aug. 1967
Sept. 1967
| Oct. 1967
Nov. 1967
Dec. 1967
Jan. 1968
Feb. 1968
Mar. 1968
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
...
48.3
114 110 119 119 135 140 121 119 121 121 127 121
15.2 102 102 102 102 102 102 102 102 102 102 102 102
3.0 100 100 100 101 102 103 103 103 104 104 104 103
3.3 106 106 106 106 106 106 106 106 106 106 106 106
6.2 99 100 100 99 99 99 100 102 104 104 103 102
2.1 102 102 102 102 103 103 103 103 106 106 107 107
4.2 102 102 103 103 103 104 104 104 105 105 106 106
3.2 102 102 102 102 102 102 102 102 102 102 102 102
14.5 106 106 106 106 106 107 107 107 107 109 107 107
100.0 108 106 111 111 119 121 112 111 112 113 115 112
342. During the period under review the General Consumer Price Index started at 108 for April, fell to 106 for May, rose to 111 for June and July, advanced to 119 in August and 121 in September, but fell to 112 for October and further to 111 for November. It rose to 112 for December, and to 113 and 115 in January and February 1968 respec- tively and closed at 112 in March. Movements in the index were influenced mainly by fluctuations in the foodstuffs index, and to a lesser extent, by changes in other sections of commodities and services. The sharp rise of the general index in August and September was due to the acute shortage of food supplies from China. Conditions of supply improved considerably in October, resulting in a fall in the index. The general index was affected only to a small extent following devaluation. Its movement for the last four months of the period was due principally to seasonal variations in food supply, to the festivities of the Chinese New Year and to the cold spell in February.
78
343. Movements of the Modified Consumer Price Index:
MODIFIED CONSUMER PRICE INDEX FIGURES FOR EACH MONTH FROM APRIL 1967 TO MARCH 1968 (1963-64 = 100)
Section of Commodity/Service
Weights
attached
Apr. 1967
May 1967
June 1967
July 1967
Aug. 1967
Sept. 1967
Oct. 1967
Nov. 1967
Dec. 1967
Jan. 1968
Feb. 1968
Mar. 1968
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
55.6 114 110 120 120 137 141 122 120 122 121 128 122
12.9 102 102 102 102 102 102 102 102 102 102102|102
3.0 102 102 102 103 104 105 105 106 107 107 107 106
4.2 106 106 106 106 106 106 106 106 106 106 106 106
4.9 99 100 100 100 100 100 101 102 104 104 103 102
1.5 103 103 103 103 104 104 104 104 107 107 108 108
4.1 102 102 103 103 103 104 104 104 105 105 105 106
2.8 100 100 100 100 100 100 100 100 100 100 100 100
11.0 105 105 105 105 105 105 105 105 105 108 105 105
All Items
100.0 109 107 112 112 122 124 114 113 114 114 117 114
344.
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.
345. 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 move-
ments.
79
CONSUMER PRICE INDEX: MOVING ANNUAL AVERAGE
Average for the period of 12 month
Period
General C.P.I.
Modified C.P.I.
Sept. 1964- Aug. 1965 Oct. 1964 Sept. 1965
102.1
102.3
:
...
...
101.7
101.7
...
Nov. 1964 Oct. 1965
101.6
101.7
...
Dec.
1964-Nov. 1965
101.8
...
...
...
101.8
Jan.
1965 · Dec.
1965
102.0
102.3
Feb. 1965
1965 — Jan.
1966
102.3
102.6
...
...
Mar. 1965 - Feb.
1966
102.6
102.8
...
Apr. 1965
1965 — Mar.
1966
102.8
103.1
...
...
May 1965 Apr.
1966
102.9
103.3
...
Sept. 1965
June 1965 May 1966 July 1965
1965 — June
1966
Aug. 1965 July 1966
Aug. 1966
Oct. 1965 Sept. 1966
103.1
103.6
•
...
103.5
104.2
104.1
104.9
...
104.3
105.3
104.5
105.5
Nov. 1965 — Oct.
1966
104.4
105.3
...
...
Dec. 1965 Nov.
1966
104.4
105.3
Jan. 1966 · Dec.
1966
104.7
105.6
Feb. 1966
Jan.
1967
105.1
106.1
Mar. 1966
Feb.
1967
105.5
106.6
...
Apr. 1966
Mar. 1967
105.8
106.9
June 1966
May 1966 Apr. 1967
----
July 1966 — June Aug. 1966 - July Sept. 1966 Aug. 1967
Oct. 1966
-
Sept. 1967
106.3
107.3
May 1967 1967 1967
...
..
106.5
107.6
106.9
107.9
107.0
107.9
108.1
109.1
14
109.3
110.6
—
Nov. 1966- Oct.
1967
...
Dec. 1966
1966 — Nov.
1967
Jan.
1967 — Dec.
1967
Feb. 1967 Jan.
-
1968
Mar. 1967 - Feb.
1968
Apr. 1967- Mar. 1968
...
...
110.0
111.4
110.6
112.1
...
111.2
112.8
111.6
113.2
112.2
113.8
...
112.6
114.3
RETAIL PRICE INDEX
346. 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:
June
Sept. Dec.
Mar.
1967
1967
1967
1968
Food
Rent
155
195
169
163
119
119
119
119
...
Clothing, including footwear
117
119
119
123
80
June
Sept.
Dec.
Mar.
1967
1967
1967
1968
Fuel
Electric light
113
129
122
119
53
53
53
53
Cleaning
98
99
99
100
...
Education
140
140
140
140
Tobacco and cigarettes
134
134
134
134
Doctor and medicines
105
105
107
108
Fares
102
102
102
102
Household equipment
133
149
147
147
Hair dressing
141
146
146
146
Newspapers and stationery
145
145
141
141
Shoe repairs
104
104
104
103
Rates
100
100
100
100
...
General Retail Price Index
139
162
148
144
347. The average for the year of the General Retail Price Index was 146, a rise of eleven points from the average for the previous year. There was a peak of 162 in September 1967 due to higher prices for food items during the period of the disturbances. The lowest Index during the period was 137 for May 1967.
CONTINUOUS HOUSEHOLD EXPENDITURE SURVEYS
348. 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 throughout the year. Consequent on the depletion of the sample 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 enumerators' 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 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 immediately after the selection of the sample.
349. The continuous survey covered 598 households consisting of 3,260 persons during the period from April 1967 to March 1968, or 1,791 households consisting of 9,715 persons since its commencement in July 1965. During June and July, it was found necessary to suspend the
81
continuing surveys and concentrate resources on providing information on a number of essential items, and a series of 3-day or weekly reports was made on price movements and supply conditions in the markets until December. Variations in the expenditure patterns 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- March 1968 ($100-$1,999)
Difference
%
%
I. Foodstuffs
46.0
44.3
— 1.7
II. Housing
14.5
16.2
+1.7
III. Fuel and light
2.8
2.6
-0.2
IV. Alcoholic drink and tobacco
3.1
2.5
-0.6
V. Clothing and footwear
5.9
5.7
-0.2
VI. Durable goods
2.0
2.0
VII. Miscellaneous goods
4.0
4.0
VIII. Transport and vehicles
3.1
3.4
+0.3
IX. Services
13.8
13.7
-0.1
...
X. Non-consumption payments
4.7
5.6
+0.9
100.0
100.0
INDUSTRIAL PRODUCTION STATISTICS
350. Action on the Report on Industrial Production Statistics pre- pared by a sub-committee of the Trade and Industry Advisory Board presented in March 1967 was held up by the need to concentrate on work in connection with the distrubances. Following the creation of the Department of Census and Statistics, within whose purview it is felt that this subject falls, the Report was submitted to the Colonial Secre- tariat in March 1968 with the request that discussions on its recom- mendations be held as soon as possible.
351. 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:
1965
1966
Cotton yarn (mn. lbs.)
Cotton fabrics (mn. sq. yds.)
Wool yarn
(mn. lbs.)
288.89
649.85
17.44
673.85
16.67
292.13
82
INE DEPARTMENT LIBRA
Cotton yarn
Cotton fabrics
Wool yarn
(mn. lbs.)
(mn. sq. yds.)
(mn. lbs.)
1967
302.63
733.01
17.49
1st quarter 2nd quarter
70.80
170.83
4.07
75.23
180.07
4.82
...
3rd quarter
75.25
185.73
4.41
4th quarter
81.35
196.38
4.19
352. The number of cotton spindles, cotton looms and wool spindles has increased considerably during the past three years, as shown below:
End of year
1965
1966
1967
...
...
Cotton spindles
724,722
749,362
767,330
Cotton looms
21,198
22,016
23,148
Wool spindles
35,422
39,331
40,611
353. Retained imports of raw cotton, cotton yarn and wool tops during the years 1965 to 1967 are as follows:
1965
1966
1967
Raw cotton
(mn. lbs.)
292.14
333.46
314.71
RESEARCH
Cotton yarn
Wool tops
(mn. lbs.)
(mn. lbs.)
21.30
14.61
35.45
14.13
35.47
14.09
354. The Section continued to perform its routine functions, viz. preparing statistical tables for Departmental monthly, quarterly and annual reports, answering questionnaires from the U.N.O. and its specialized agencies, collecting basic economic data, analysing trade with selected countries, calculating import and export average prices (unit values), preparing an end-use analysis of imports for each quarter, and other ad hoc economic or statistical research exercises.
PUBLICATIONS
355. For the monthly Statistical Supplement to the Government Gazette, the Branch continued to collect and edit returns from public companies and other Government Departments. In October, a new table was added to this supplement setting out the number of new applica- tions received for telephone services and new lines connected, together with the total equipped capacity of exchange lines and total working exchange lines, and the size of the waiting list.
83
356. With effect from the January 1968 issue, the monthly series of Economic Indicators was re-designed and published for the first time in printed form. In this new series, the indicators were supplemented by charts and graphs, explanatory notes and extended time series.
357. The drafting for publication of 'A Review of Overseas Trade in 1967' was completed in March 1968. This review contains a detailed analysis of domestic exports, re-exports and imports by commodity patterns. Included in the review are nine tables, eight appendices and seven graphs.
358. Preparation commenced in July 1967 of a Handbook of Sta- tistics which would contain all essential statistical series published since early post-war years up to 1967. By March 1968, draft chapters com- pleted included area and climate, population, births and deaths, mar- riages, migration, tourism, employment, primary production industrial output and transport.
DATA PROCESSING
359. The Data Processing Section is responsible for the monthly tabulation of the Colony's trade statistics, commodity-by-country (pub- lished) and country-by-commodity (unpublished) and their special returns. Each month some 70 returns are tabulated, either by countries or by commodities, for consulates, trade commissions and merchant houses. For the annual trade statistics, a special tabulated supplement by commodity groups and divisions within countries was prepared. During the period of disturbances, a daily, statistical tabulation on food- stuffs imported from China was carried out. Other work relating to trade statistics included monthly summary tables for the statistical supple- ment to the Government Gazette; quarterly end-user analysis of imports and re-exports; analysis of re-exports by country-of-origin; cotton textiles returns for the G.A.T.T. and the International Cotton Advisory Committee and an analysis of trade declarations by broad value groups.
360. 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 English School Certificate Examination, the Chinese School Certificate Examina- tion and the Secondary School Entrance Examination. Work on pro- cessing the results of these examinations started in May; the tabulating of examination results for publication and the listing of results of
84
candidates for each school were completed in August. Further work included listing certificates for passes and statements of full results for individual candidates.
361. For the Labour Department, punching and tabulating facilities were provided for the analysis of manpower surveys on the plastics industry and the automobile repairing and servicing trades, and the compilation of quarterly returns of factory employment and vacancy statistics. The compilation of monthly, quarterly and yearly returns on industrial and occupational accidents were carried out on a routine basis.
362. Special services rendered to other government departments included the processing and tabulating of returns on personal incomes of 1966-67 analysed by family status and by income brackets for the Inland Revenue Department, the processing of results of the Rank and File Promotion Examination, 1967 for the Police Force, the analysis of the Dental General Treatment Surveys of 1964 and 1965, and the special Dental Survey 1966 for the Medical and Health Department, and the reproduction of hydrological survey punched cards for the years 1965 to 1967 for the Water Authority.
363. Other data processing matters dealt with in the machine room on a routine basis comprised the monthly and annual analysis of death statistics for the Registrar General's Department and the filing of meteorological reports and reproducing of punched cards with mete- orological information collected from ships' log books for the Royal Observatory. The Type '555' Electronic Calculator was made available for the Stores Department for four days a month.
364. From time to time, especially during May to August, many hours of overtime work were necessary in order to observe deadline dates, to catch up work already delayed and to perform urgent ad hoc jobs. During the year under review, four and a half million punch cards were consumed.
CONFERENCES
365. Mr. C. T. STRATTON, Senior Statistician, represented Hong Kong at the 8th session of the Conference of Asian Statisticians held in Sydney from 8th to 22nd September 1967. Mr. K. L. NG, Statistician, participated in an E.C.A.F.E. Seminar on Industrial Statistics held in Bangkok from 12th to 31st June 1967.
85
CHAPTER 8
ADMINISTRATION AND ACCOUNTS BRANCHES
GENERAL
366. The Administration and Accounts Branches are headed by a Senior Executive Officer and a Treasury Accountant respectively. The Senior Executive Officer, who is a Secretary of the Department, is responsible for staff and establishment matters as well as general administrative control, while the Treasury Accountant exercises respon- sibility for departmental financial control, (including accounting for the expenditure of overseas offices) and all stores matters. There are four Executive Officers in the two branches who perform accounting, personnel and general functions.
OVERSEAS OFFICES
367. The Government 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 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
368. A major change in departmental organization occurred in September when the former Textiles and Overseas Trade Relations Divisions were reorganized into two Commercial Relations Divisions, one dealing with commercial relations with Europe and with the internal implementation of any associated controls or connected activities, and
86
the other taking responsibility for similar matters in respect of the rest of the world together with Hong Kong's relations with international organizations concerned with trade and economics.
369. An organization chart of the Department as at 31st March 1968 is shown at Table 9 with the divisional staff establishment given in
brackets.
Senior Staff Movements
370. Mr. C. P. HADDON-CAVE, Administrative Officer Staff Grade C, was Deputy Director, Commercial Relations, until 12th September 1967, when he became Deputy Economic Secretary. Mr. H. D. HILLER, Administrative Officer Staff Grade C, previously Assistant Director, was appointed to succeed Mr. HADDON-CAVE. Mr. W. DORWARD, Senior Trade Officer, was appointed to act as Assistant Director in place of Mr. MILLER.
371. Mr. D. H. JORDAN, M.B.E., Administrative Officer Staff Grade B2, replaced Mr. MILLER on 27th December 1967 as Deputy Director, Commercial Relations.
372. Mr. J. H. MARTIN, Assistant Director, Brussels Office, pro- ceeded on vacation leave prior to completion of contract on 1st February 1968. He was succeeded by Mr. P. V. DODGE, Administrative Officer, Staff Grade C.
373. Mr. D. M. SELLERS, Administrative Officer Staff Grade C, arrived in the Department on 20th February 1968, as Director-designate of the London Office.
374. Mr. L. C. MILLINGTON, Chief Preventive Officer, proceeded on vacation leave prior to retirement on 31st October 1967. He was replaced by Mr. A. L. TOKLEY, Assistant Chief Preventive Officer.
Establishment
375. The year began with an approved establishment of 1,526 posts including 827 posts in the Preventive Service. Staff increases approved for the new financial year resulted in a total net increase of 33 posts over the previous year, the majority of which were in the Preventive Service.
376. Supernumerary provision was made for departmental staff seconded to the Trade Development Council, Productivity Council and
87
Export Credit Insurance Corporation. The creation of the Trade Development Council posts was offset by the deletion of all posts formerly authorized for the Export Promotion Division and Sydney Office. 36 departmental officers were seconded to the three organiza- tions at the beginning of the year and 17 were transferred permanently from Government during the year, including 2 Senior Trade Officers and one Trade Officer. The loss of these 3 officers severely depleted the exiguous experienced staff of the grade, but was accepted in the wider public interest.
377. On 15th November 1967 Finance Committee approved the creation of the Census and Statistics Department. The Statistics Branch of the Commerce & Industry Department was taken over and became the Economic Statistics Division of the new department. 132 posts were transferred, reducing the Department's civilian and supernumerary establishment from 626 and 118 posts to 496 and 116 posts respectively.
378. Outside the normal context of estimating staff requirements eight separate submissions requesting posts by supplementary provision were put to the Establishment Branch during the year. The reasons for dealing with the proposals in this way were either because the proposal involved a special policy decision, or, because the commitment was unforeseen at the time the estimates were prepared. The branches of the Department involved were the Preventive Service, Textiles Division, Industry Division and Trade Licensing and Controls.
Recruitment
379. The Administration Branch undertook eight separate recruit- ment exercises during the year, to fill vacancies in the grades of Assistant Trade Officer, Industry Assistants Classes I and II, Revenue Sub-Inspector, Woman Revenue Sub-Inspector, Assistant Statistician, Assistant Revenue Officer and Woman Assistant Revenue Officer. 113 newly appointed' officers assumed duty during the period. Response to advertisements in both the English and Chinese language newspapers was impressive, particularly for the Preventive Service Grades.
380. A new feature of the Department's recruitment procedure was the use of examinations set by the Examinations Unit of the Colonial Secretariat. This considerably reduced time spent on processing applica- tions by the Department.
88
Training
381. Mr. K. H. YEUNG, Assistant Trade Officer, left the Colony in January to attend the six-month's G.A.T.T. in-Service Training Course. 382. During his vacation leave, Mr. R. A. Davie, Assistant Trade Officer, attended the General Management Course at Ashridge Manage- ment College; he was also attached to the London Office and the Import Licensing Section of the Board of Trade.
383. Mr. Peter KIANG, Assistant Trade Officer, attended the Fifth International Summer Course on Industrialization at the Hague and the Human Aspects of Management Course at Roffey Park Institute.
384. Messrs. A. S. N. CHEUNG and K. Y. LEE, Assistant Trade Officers, attended the Export Marketing Training Course organized by the Hong Kong Productivity Council.
385. Mr. K. K. LEUNG, Senior Revenue Inspector, was awarded a merit trip to the United Kingdom. Whilst he was in England, he attended the Human Aspects of Management Course and the Com- munication Course at Roffey Park Institute. He also had a series of attachments to H.M. Customs and Excise.
386. Mr. A. SANDERS, Senior Revenue Inspector, undertook a short training course on the operation of vessels by H.M. Customs and Excise during his vacation leave.
387. Four Revenue Inspectors were given four months' training in the United Kingdom, consisting of attendance at a Human Aspects of Management Course at Chesters and attachment to H.M. Customs and Excise.
388. The Treasury Accountant and some Executive Officers attend- ed a number of courses on accounting and techniques of supervision.
389. Provision was made in the 1968-69 Estimates for an Assistant Trade Officer, an Industry Officer, and four Revenue Inspectors to be sent for training overseas.
OFFICE ACCOMMODATION
390. With the continued expansion of the Department's activities, the need for additional and improved accommodation in Headquarters became urgent. As a result of submissions to the Colonial Secretariat concerning the need for a better standard of accommodation and increased space, an item entitled 'Renovation of Fire Brigade Building
89
---Investigation' was included in Category B of the Public Works Pro- gramme in March. A survey will be undertaken by the Public Works Department to ascertain the feasibility of renovating Fire Brigade Building in terms of cost and improved facilities, taking into account the transfer of the Preventive Service to other accommodation in late 1969 and the release of the 4th and 5th floors by the Census and Statistics and Fire Services Departments respectively.
391. At the end of the year, work on the Rumsey Street Multi- Storey Car Park was about to begin. It is expected that accommodation within the building for the Dutiable Commodities Office and a greater part of the Preventive Service on the Island will be ready for occupa- tion towards the end of 1969.
392. In August, the Special Section of the Preventive Service began to operate in new offices over the Central Government Pier. The Kowloon Excise Station moved into accommodation in the Ocean Terminal. As a result of Border incidents during the summer, the Man Kam To Revenue Sub-Station was demolished, and a cargo examina- tion shed built in its place at Shek Wu Hui. Plans are under considera- tion for establishing a permanent station in the area.
393. Additional space was obtained in Fund House and the Hong Kong & Shanghai Bank Building, Mongkok, for the Dutiable Com- modities Office and the Kowloon Office respectively. Accommodation in Connaught Building was leased in July to provide for a newly formed unit dealing with food supplies. In October, the Hong Kong Inspection Section of the Industry Inspection Branch moved to Con- naught Building to share offices with the Food Unit, thereby decreasing the congestion of the Industrial Development Branch in Headquarters.
394. On 1st April, two sub-offices were opened in Kwun Tong and Tsuen Wan on a trial basis to assist manufacturers and industrialists in certification and licensing matters. While good use has been made of the services offered by the Kwun Tong Sub-Office, the Tsuen Wan Sub- Office was closed on 31st March because of insufficient usage.
395. Minor structural alterations and repairs were made both in Headquarters and Revenue Stations to improve facilities.
WELFARE
396. Staff Welfare is the responsibility of the Deputy Director, Administration & Industry, who is assisted by the Secretary.
90
Departmental Quarters
397. The sketch plans for the Preventive Service Rank & File Quarters in Kowloon were approved and arrangements were being made to upgrade the project to Category A in the Public Works Programme.
Preventive Service Senior Staff Club
398. The Revenue Inspector's Mess was re-titled the Preventive Service Senior Staff Club. It continued to be the venue for a number of successful social functions, the highlight being the Annual Christmas Dance. Presentations to officers going on retirement are also held in the club. Throughout the year many members of the staff made use of the dining facilities of the club for their mid-day meal.
Clerical Canteen
399. The Canteen, which is used primarily by junior officers of the Preventive Service and clerical staff working in Fire Brigade Building, continued to be well supported during the period under review. The redecoration in July has done much to brighten the atmosphere of the
canteen.
FINANCE AND STORES
Revenue
400. Net revenue collected by the Department amounted to $335,703,787 ($324,611,902), an increase of 3.4%. (See Table 10). This was 17.7% of all recurrent revenue collected by Government during the year. Details of revenue for dutiable commodities are given in Table 5 and 6.
401. I had originally estimated that some $8.5 million would be collected from ad valorem charges on trade declarations for the first full year of operation; in fact the yield was almost $9.7 million emphasising the continued growth of the Colony's trade.
Expenditure
402. Supplementary provision of $213,950 over the estimate of $19,577,000 (including $544,400 subsequently frozen for the newly created Census & Statistics Department) was approved during the financial year. The total departmental expenditure amounted to $16,889,569.80.
91
403. Devaluation of the Hong Kong Dollar in November, 1967 slightly increased the operation costs of the four overseas offices. Despite this, the actual expenditure during the year fell short of the approved provision by $270,000.
404. In the year under review a total of 22 delegations left Hong Kong to attend conferences, consultations, etc. on trade and related matters overseas. The expenditure incurred by these delegations amount- ed to $305,800.
Police Children's Education Fund
405. When this fund was launched in mid-May, during the dis- turbances, I was appointed Trustee and became responsible for the collection, banking and accounting arrangements of the many donations made to it. The fund was closed on 12th June 1967 when a total of $2.6 million had been subscribed by the public. Ordinance numbers 68 and 69 of 1967 established the Commissioner of Police as Trustee of the Police Children's Education Trust and Police Education and Welfare Trust thereby relieving me of my trusteeship. A statement of account for the period 19th May to 30th November 1967 was prepared and all donations (which at the 30th November 1967 had grown to approximately $3.7 million as a result of late subscriptions) were trans- ferred to the trusteeship of the Commissioner of Police.
Stores
406. Improved accommodation was obtained for the uniform and stationery stores which have now been centralized on the 6th floor of Fire Brigade Building. The total area available, however, is still short of that recommended by the Controller of Stores as being desirable.
407. Confiscated liquor, tobacco and cigarettes continue to be sold at an authorized rate equivalent to the retail price less 20%, but with- out any warranty as to condition. Free issues were confined to certain approved charitable organizations. Compared with last year, the quanti- ties sold or issued free and their respective values were as follows:
Sold:
1966-67
1967-68
Quantity
Value
Quantity
Value
$
$
Liquor
24,081 bots.
42,762
6,667 bots.
27,207
Cigarettes
Cigars
153,300 pcs. 5,943 pcs.
340,520 pcs.
8,690
11,051
3,732 pcs.
1,070
92
Tobacco
Quantity
Frozen meat
Total
Distributed free:
Liquor
Cigarettes
Tobacco
Cigars
1966-67
Value
$
2 lbs.
47
1967-68
Quantity
Value
$
1,672 lbs.
7,463
$53,860
Total
..
$44,430
1966-67
1967-68
Quantity
Value
Quantity
Value
$
$
4,958 bots.
20,282
4,140 bots.
17,650
577,947 pcs.
18,076
824,992 pcs.
19,800
254 lbs.
1,253
1,263 lbs.
6,315
3,250 pcs.
350
4,050 pcs.
405
Total
$39,961
Total
$44,170
408. Proceeds of cash sales are apportioned between the appropriate revenue and expenditure sub-heads, namely Duties, the Revenue Reward Fund, and Handling and Storage of seized and confiscated goods (for frozen meat only), 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 trans- ferred to general revenue. 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
...
$18,058
2,560
378
...
...
23,120
$44,116
Head 73 Subhead 5-Handling and storage of seized
and confiscated goods Revenue Reward Fund
...
409. 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
410. The Department operates two Welfare Funds, one for members of the Preventive Service and the other for the civilian staff, the latter
93
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. Loans amounting to $4,960.00 were made during the year to help to meet various costs, e.g. loss of personal belongings, funeral, and education expenses in respect of serving and retired officers and their dependants. Purchases amounting to $442.40 were authorized for the general welfare of the Preventive Service, e.g. washing machine and detergents.
18th December 1968.
T. D. SORBY,
Director of Commerce and Industry.
94
TABLES
95
96
TABLE 1
EXPORTS OF RESTRAINED COTTON TEXTILES TO BRITAIN
1964-1968
1964 (6)
1965 (b)
1966
1967
1968
Description
Unit
Group Limit
Exports
Group Limit
Exports
Group Limit
Exports
Group Limit
Exports
Group Limit
Yarn
Lbs.
6,300,000
Finished Piecegoods
Loomstate Piecegoods... Sq.yds.
Sq.yds.
102,130,811 † (a)
卜
Made-ups and Garments Sq.yds. 86,811,189
6,241,132 6,300,000
81,688,535
20,356,877
86,749,784 89,825,838
105,682,162 (a)
6,225,010
113,582,250(c)
21,587,146
59,832,933
6,300,000
6,149,452 6,363,000
78,360,590
185,000,000 (d) 26,538,616 186,850,000 (d) 22,976,790
†
83,409,290
82,830,714
(d) 22,976,790 188,718,500(d)
6,123,601
6,426,630
80,976,105
Miscellaneous Cotton
Manufactures
...
Sq.yds.
2,300,000
1,586,005 2,388,101
1,968,389 2,411,982
Note: (a) In 1964 and 1965, group limits for piecegoods, made-ups and garments groups include a supplementary quota of
14,454,000 sq. yds. Sub-limit for finished piecegoods was 30 million sq. yds.
(b) Export figures for 1964 and 1965 include shipments made during the carryover period in the subsequent year.
(c) Made-ups and garments quota could be shipped as piecegoods under the special shipment arrangements in late 1965.
(d) Group limits for finished piecegoods, and made-ups and garments:
1966
1967
1968
Finished Piecegoods
30,000,000 sq. yds.
Made-ups and Garments
85,000,000 sq. yds.
30,300,000 sq. yds.
85,850,000 sq. yds.
30,603,000 sq. yds.
86,708,500 sq. yds.
TABLE 2
EXPORTS OF COTTON TEXTILES RESTRAINED UNDER G.A.T.T. COTTON TEXTILES ARRANGEMENTS
FROM OCTOBER, 1962 TO SEPTEMBER, 1968
Restrained Countries
Unit
U.S.A.
1967-68
Restraint Limit
Sq. yd. 371,306,250
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
Restraint Limit
Exports
Restraint Limit
Exports
Restraint Limit
Exports
Restraint Limit
Exports
Restraint Limit
Exports
(All cotton textiles)
Canada
Doz.
594,000 (5 garment categories)
(All cotton textiles)
736,000 (5 garment categories)
(All cotton
textiles)
(37 categories)
|343,625,000(6)| 323,943,161|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
(30
(36 categories)
categories)
601,714
736,000 (5 garment categories)
634,022 712,000 599,243 614,000 484,595 600,000
517,954
(7 garment
categories)
(6 garment categories)
Sq. yd. 11,090,000
(All fabrics including 5
11,090,000
7,849,083 9,406,000
8,846,288
(All fabrics
including 5
(11 fabric categories)
3,000,000 4,728,883 N.A. (6 fabric categories)
(6 garment categories) 5,863,113 N.A.
5,994,087
specific
specific
97
nightwear)
Doz.
N.A.
Federal
Republic of Germany
Doz.
categories)
categories)
66,650,000(4) 77,000,000
(sq. yds.)
(sq. yds.)
(7 groups)
(7 groups)
Norway
Doz.
24,000
(Woven
23,000
(Woven nightwear)
66,000
72,040,000 (sq. yds.)
(7 groups)
(Woven
400,000
399,884
380,000 339,167(3)
350,000
309,139 N.A.
347,987
(Woven
nightwear)
22,996
22,000
22,000
20,000
19,788
18,000
16,951
16,000
15,960
nightwear)
34,634
61,000
23,850
56,000
31,790
51,000
45,389
46,000
44,975
(Woven sport
(Woven
& work shirts)
sport &
work shirts);
Benelux
Pcs.
8,236,386
750,000(2)
547,071 1,251,517
(sq. yds.)
(Woven shirts)
(Woven (Woven shirts)
shirts)
1,053,245 (Woven shirts)
N.A.
1,539,648 N.A.
1,152,300 N.A.
1,015,320
Sq. yd. 6 made-ups
and garment categories
1,197,110(5) (sq. yds.)
1,058,870 N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
(sq. yds.)
5 categories 5 categories
(1) A further 35.6 million sq. yds. was added to the first billateral 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) From 1st January to 31st December 1968.
(5) From 18th July to 30th September 1967.
(6) As a result of Hong Kong agreeing to the adoption of the dual criteria in defining cotton textiles, the aggregate limit was in- creased by 15 million square yards (an actual 5 million sq. yds. was negotiated for the balance 1st June 30th September 1967 of the second bilateral year), with a growth of 5% in the third bilateral year.
N.A. not applicable.
=
TABLE 4
TRADE COMPLAINTS FROM OVERSEAS COMPANIES OR INDIVIDUALS
HANDLED BY THE DEPARTMENT
FROM 1.4.1967 to 31.3.1968
Country
Australia
North Central South America America America
Europe Africa
Middle East
Category
and New Zealand
Asia
Total
99
Outstanding debts
33
9
9
59
26
17
10
10
173
...
Non-delivery
533
9
69
13
14
95
9
742
Infringement of patents
1
3
4
and designs
Infringement of trade
marks
Breach of contract
3
3
5
1
1
2
9
Short shipment
11
6
2
2
4
2
27
...
Inferior quality
Miscellaneous
...
33
2
32
7
9
13
4
100
27
2
2
8
2
3
1
45
...
Total
638
22
11
185
51
43
127
26
1,103
L.BRARY
TABLE 5
DUTY FROM DUTIABL COMMODITIES (GROSS)
1967-1968
1965-1966
1966-1967
Unit
Quantity
% Change
Duty
%
Change
Quantity
% Change
Duty
% Change
Quantity
% Change
Duty
% Change
$
Liquor:
Whisky
Brandy Gin
Wines
Beer
Other European Type
Chinese Type-
(a) Locally Distilled
(b) Imported
Spirituous Liquor other than
Intoxicating Liquor
Methyl Alcohol
Tobacco:
Total
Cigarettes and Cigars
European Smoking Tobacco
(including Snuff)
Chinese Prepared Tobacco Tobacco Leaf
Total
Hydrocarbon Oils:
Liquefied Petroleum Gas
Light Oils
Diesel Oils
Furnace Oils
Other Type
Table Waters
140,329
+ 10.3
9,209,095
+ 10.7
314,234
48,306
+ 17.2 7.6
22,722,292
+ 17.7
3,248,485
147,279 308,111
+ 7.0
170,276
+ 19.4
3,554,495
+ 20.2
9,328,449
+ 16.7
+ 175
21,150
1,916,031 1,614,559 140,744 3,552
13,697,630
+ 23.2
+ 14.3
3.5
13,305,759 15,177,513
1,903,006 54,984
18,109,228 1,484,558
+ 18.5 + 23.6
48,989 156,597 8,783,792
22,181
—
7.5
7.7
+ 18.1
1,802,974 1,600,939
+ 27.6
+ 12.0
88,769,415
2.2 + 36.1
132,914
3,011
+ 11,9
13,006,787
Gallons
127,254
268,034
22
44,906
**
142,668 7,996,576
>>
17,165
++++++
7.6
8,320,674
8.3
19,305,516
9.6
3,036,177
3.0
6.9
2.4
2,958,217 15,276,598 1,201,243
11
++++++
*
2,071,519 1,411,998
0.8
+ 21.3
14,418,550 12,847,592
-
+
145,775 2,783
27.2 2.5
12,228,678
+ 6.3
1,946,027 40,396
79,350,990
-
16.1 243
+ 7.1
Foxdea 88 92
:
3
:
Locally Manufactured Liquor
Intoxicating Liquor
Spirituous Liquor other than
Intoxicating Liquor
Table Waters
Tobacco
Hydrocarbon Oils
Total
+1+0+
5.0
9,649,178
1.9
22,610,288
1.4
3,299,101
8.0
3,198,770
5.8
16,693,451
4.9
1,572,671
+1+1+
4.8
0.5
1.6
10.0
7.8
5.9
5.9
12,495,612
6.1
0.8 14,574,652
4.0
5.6
15.2
5.0
1,761,227 48,826
85,903,776
7.5
11.2
1
3.2
| |
Pounds
6,189,989
+ 3.0
* 54,296,655
+
+7
68,007 446,547 17,178,892
+ 4.8
20.7 8.5
*
23,883,435
+ 4.0
453,622 1,116,368 *100,946,814
156,813,459
-
19.4
8.5
+ 4.3
+41
5,506,451
66,238
415,085 11,475,733
-
11.0
58,817,590
+ 8.3
5,503,560
0.1
58,808,545
2.6
562,125
7.0
1,037,713
+ 23.9 7.0
70,222
33.2
90,361,009
10.5
423,631 12,888,979
+++
6.0
2.1
597,575 1,059,075
+ 12.3
101,709,752
+ 4.4
17,463,507
26.9
150,778,437
3.8
18,886,392
+
8.1 162,174,947
[
+
+++
Pounds Imp. Gals.
+
39
26,320,710 60,473,912 227,421,650 48,394,480
362,610,752
++++
5.9
+ 13.7
4.7 4.1
† 31,913,052 † 22,966,122 22,742,165 4,776,154
++++
27,055,054 66,819,686
+ 2.8
+ 10.5
4.3
+ 6.1
82,397,493
+ 8.7
304,354,020 51,925,776
450,154,536
+ 33.8 + 7.3
+ 24.1
38,025,038 30,140,047 30,435,402 5,118,764
103,719,251
+ 19.2 + 31,2 + 33.8 + 7.2
+ 25.9
20,233,018 30,816,555 65,504,671
315,116,477
49,938,265
+1+1
+ 13.9
2.0
404,660 40,991,008 30,294,172
461,375,968
20,233,018 lb.
3.5 31,511,648
3.8
+ 2.5
4,924,005
108,125,493
:
0.1
6.3
2.1
12.6
7.6
+++[
+
7.8
0.5
3.5
3.8
4.2
1.3
15,201,590
+ 16.8
7,296,765
+ 16.8
16,744,160
+ 10.1
8,046,798
+ 10.2
Refund and Drawback
Gallons
13,010,206
-
1.3
6,244,900
2,231,590
+5.1
60,106 61
+ 15.3
78.5
63,129,674 6,879
65,428,310
+ 28.6 13.0
+ 27.6
* Duty rates increased with effect from 24.2.66.
† Duty rates on motor spirit and diesel oil for Other Vehicles increased with effect from 24.2.68.
100
124,140 3,293,597
35,639 117
32,542,824
}
+ 53.2
40.7
+91.8
48.5
6,291
36,002,608
8.5
45.0
123,780 2,692,306
67,602 9,913
40,671,741
0.3 18.3
+ 89.7 +8372.6 + 25,0
4,657
26.0
+ Liquefied petroleum gas became dutiable with effect from 28.6.67.
43,569,999
101
+ 21.0
TABLE 6
REVENUE FROM DUTIABLE COMMODITIES LICENCES, 1967-68
No. of Licences Issued
Revenue
Importer's:
Liquor
Tobacco
Hydrocarbon Oils
Table Waters
Methyl Alcohol
Exporter's:
Liquor
$
350
...
175,000.00
76
38,000.00
...
184
95,000.00
...
•
44
13,200.00
45
450.00
190
3,250.00
60
2,070.00
40
400.00
17
...
...
...
...
1,330.00
9
90.00
...
...
534 2,451
799,650.00 1,491,600.00
...
...
450
45,000.00
...
...
·
195
97,500.00
447
44,700.00
...
43
430.00
...
1
50.00
...
...
454
•
...
67,500.00
2,019
185,070.00
...
...
...
4,935
298,425.00
...
...
...
...
11,274 1,233
688,128.50
30,825.00
...
34
340.00
...
..
...
...
11
550.00
...
13
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
Liquor
Still...
Tobacco
...
Liquor Manufacturer
Table Waters
...
Warehouse:
Liquor
Tobacco
...
...
3262
23
18,000.00
...
6
6,000.00
...
17
12,500.00
...
...
19
24,070.00
8
11,000.00
...
19
19,000.00
16
900.00
...
...
6
60.00
356
...
3,650.00
...
...
Hydrocarbon Oils
Table Waters
Methyl Alcohol
...
...
...
...
Ship and Harbour Vessel Licences
Licence fees for persons importing for own
use and miscellaneous
Net Total
102
32,098.85
25,575
$4,205,937.35
TABLE 7
MAJOR CONFISCATIONS UNDER OTHER LEGISLATION 1967-1968
Legislation
Importation and Exporta-
tion Ordinance, Chapter 50, and Regulations made thereunder
Commodity
...
Gold bars Indonesian silver coins Indonesian copper coins Acetic anhydride Gramophone records Wrist watches
Wrist watch straps/bands Brass/copper scraps
Roasted coffee beans
Coffee powder Transceivers Transistor radios Walkie Talkies
...
...
Unit
Quantity
1b.
460.20
no.
755
lb.
944.00
gal.
208.00
no.
9,197
...
no.
1,175
no.
2,235
...
lb.
180.00
Ib.
130.00
lb.
864.00
no.
33
no.
164
set
3
Beef fillet...
lb.
1,800.00
...
Lighter flints
tin
27
Chloramphenicol powder
kg.
100.00
Human hair
lb.
440.00
Woollen piecegoods
lb.
456.00
Handkerchiefs
doz.
3,850
Sandalwood logs
lb.
2,400.00
Red dates
Ib.
2,666.00
Radio active equipment
set
5
Formalin ...
gal.
32
Mono-sodium glutimate
Ib.
3,700
Sharks fins
...
kg.
114.50
Penicillin Ordinance,
Chapter 137
Pharmacy & Poisons
Ordinance, Chapter 138
Chloramphenicol palmitate
kg.
96.00
Tifoinycine
tablet
29,000
Tedracycline
tablet
1,900
Methyl parathion
bottle
4
Merchandise Marks
Watch dials
Ordinance, Chapter 41
Watch case
Watch bands
Watch backs
...
Watch winding crowns
Metal dies
Hand operated press
no.
755
no.
8
no.
50
...
no.
50
no.
705
...
no.
3
no.
1
103
TABLE 8
CONFISCATIONS UNDER THE DUTIABLE COMMODITIES ORDINANCE. CHAPTER 109, AND DANGEROUS DRUGS ORDINANCE, CHAPTER 134
Tobacco
Commodity
Chinese prepared tobacco
Foreign cigarettes
Macau and Chinese cigarettes
Cigars
...
Tobacco stems
Tobacco leaf
Pipe tobacco
Liquor
...
...
...
...
Quantity
Unit
1966-67
1967-68
lb.
...
lb.
230.05 1,505.19
282.48
2,419.21
lb.
1,439.68
763.44
...
lb.
102.45
193.50
Ib.
46.30
45.33
lb.
376.00
138.40
...
lb.
30.70
16.20
European type liquor Chinese type liquor
Beer
...
...
Chinese medicinal wine
gal.
817.56
772.47
gal.
3,579.98
2,743.28
gal.
1,057.14
649.98
gal.
229.62
129.11
Alcohol
Mash Stills
...
...
gal,
119.65
226.26
gal.
87,901.00
156,268.00
...
...
...
...
no.
172
130
Hydrocarbon Oils
Treated diesel oil
Dangerous Drugs
Opium, raw Opium, prepared
...
:
...
gal.
7,364.25
28,421.50
lb.
776.22
363.03
lb.
16.56
2.00
...
...
...
Opium, dross
Opium, water ..
lb.
7.16
0.53
...
...
fl. oz.
1,770.80
100.80
Morphine hydrochloride
Morphine hydrochloride
Diacetymorphine hydrochloride
lb.
21.61
...
lb.
79.55
34.63
...
lb.
8.50
0.15
Barbitone
...
Indian hemp (marijuana)
Opium poppy
Opium pipes
Opium pipe heads
lb.
52.38
331.51
...
lb.
0.15
...
...
lb.
6.50
...
...
...
no.
no.
16
Opium lamps
no.
29
222
22
7
2
104
Accounts and Stores. Personnel.
Internal Administrative Matters.
Establishment
Permanent
(95)
31st March, 1968.
Administration & Industry Deputy Director,
Industry Assistant Director,
Division Industry & Certification
TABLE 9
COMMERCE AND INDUSTRY DEPARTMENT, HONG KONG
ORGANIZATION CHART
DIRECTOR
Controls Assistant Director,
Industrial
Accounts Branches Administration &
Branch Development
Branch Certification
Branch Inspection Industry
and Trade Licensing Dutiable Commodities
Division
Treasury Accountant Senior Executive Offr.
Trade Officer Senior
Senior
Senior
Trade Officer
Industry Officer
Trade Officer
Industrial Aspects of Town Planning,
Liaison with Industrial
Organizations.
Trade Complaints.
General Assistance to Industry.
105
Certification of Origin (including Standard
Certificates, Comprehen- sive Certificates for
the American Market
and Commonwealth
Preference Documenta- tion).
Inspection of Factories and Consignments under Cer- tification Requirements, including Investigations and Prosecutions.
Import and Export Licensing.
Exchange Controls (Licensing Procedure).
Strategic Commodities. Reserved Commodities (Rice, Frozen Meat, etc.) Collection of Duties on Liquor, Tobacco, Hydrocarbon Oils, Table Waters, Methyl Alcohol.
Preventive Chief
Officer
Protection of Revenue.
Import and Export and Dutiable Commodities Controls.
Anti-narcotics Operations.
Public Health and Safety Operations.
Immigration Patrols,
Commercial Relations Deputy Director,
Commercial Relations Assistant Director,
(Europe)
(Other Regions) Commercial Relations Assistant Director,
Service Preventive
"E" Division
"R" Division
Senior
Trade Officer
Senior
Trade Officer
Uniformed
(798)
Civilian
(26)
(22)
(85)
(93)
(83)
(824)
(32)
(46)
(18)
Commercial Policy (Europe).
Textile Export Controls. Liaison with Trade Development Council
and Export Credit Insurance Corporation. Trade and Industry Advisory Board.
Commercial Policy (Other Regions).
International Trade Organizations.
Cotton Advisory Board.
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